What Is A Tech Startup?

What Is A Tech Startup?

A tech startup is a temporary organization that aims to create a unique value proposition using technology and looking for a repeatable and scalable business model to generate revenue. The key point that distinguishes tech startups from non-tech startups is that tech startups develop technological advances on their own that their competitors don’t have yet. Once a working business model and repeatable sales model those fit to the market found, the tech startup starts to iterate into a profitable company.

Let’s go through the important parts of the definition in detail to have a better understanding;

Temporary Organization

In the early stages, a tech startup tests its core product idea to fit to the market and evolves its product based on the market response. Even though the common approach of tech startup owners is setting up a business entity for legal and other activities; as the tech startup makes no profit yet it’s not called a company but an organization in terminology.

Unique Value Proposition Using Technology

A unique value proposition refers to the added value that the tech startup promises to deliver to customers if they choose to purchase its products while their competitors can not offer such a promise. In other words, a tech startup differs from its competitors with the unique and new technology that customers can benefit.

Repeatable And Scalable Business Model

If the product to be sold generates more revenue than the total expenses of production, sales and marketing it means the tech startup has a scalable business model.

And a repeatable business model is the one where you can execute the same process above to get additional customers and make the incremental profit.

Develop Technological Advances

Invention and technological developments are indispensable for a tech startup. A tech startup takes its part in technological cumulativeness by inventing or developing new technologies.