The short and easy answer is no. Startups have never been and never will be about tech.

In its essence, a startup is about a young company or a new business in search of a unique business model, product or service and bring it to the market. They’re in the early stages of seeking support for their product, platform or service that they believe would disrupt the current market place in some way. As such, they’re “entrepreneurial ventures” that need funding and financial backing to get off the ground. This is also why startups can be risky to invest in because the idea or concept can fail. 

Examples of Startups

Uber and Netflix started as a startup. Their business models were once unknown, and they brought them to the market. Now, they’ve grown into huge companies that have offices around the world.

This, therefore, means that the new ridesharing apps or streaming services today are not “startups.” Even if they lack initial funds, their business models are already known. But take, for example, a delivery firm offering a weekly subscription for personalised ready-to-eat vegan food and organic groceries? Well, that can be a startup! 

You need a different business model to be considered a startup. If you have a new real estate practice, that’s just a new business. But if you have a completely different way of selling homes, that’d be a startup. Startups are something rather new. It’s not just about replicating similar existing business models. You need to be breaking new ground. 

Startups and Small Businesses

Just because it’s in tech, doesn’t mean it’s a startup. Today, however, most startups are indeed in tech because startups are designed to find a “repeatable and scalable” business model. This is also the difference between startups and small businesses.

Startups are envisioned to be scaled while small businesses can just be as it is. And so many startups are in tech because, as we all know, technology is easily scalable. There are also fewer barriers to entry when it comes to tech segments, and that’s why you can see many tech businesses as startups.

Marketing and Innovation

Peter Drucker, a noteworthy economist has pointed out that only two things create value in business: Marketing and Innovation. Every successful business must do one or both of those things to exist. However, every business can create value through marketing, but not each one can be innovative. 

General appliance companies, new mobile apps, or a new bakery can succeed or fail because of marketing. But are they innovative? 

Startups require innovation and the discovery of a new model. Even if you have the innovation (usually technology), you also need to have marketing (finding the model) working with each other. 

A completely new kind of car would be an innovative new product. That’s how Tesla started. However, technology doesn’t have to be code or hardware. It can be the new plastic for drinks, the new kind of pen or paper. Even a new type of tire can be technology. 

The Key Takeaways

Startups are not only about tech. However, technology-oriented companies are indeed usually startups because technology is easily scaled. 

Startups are defined not only by their marketing model but also their innovativeness. A food delivery app can be a new business, but they’re not a startup even if it’s a different app and a new venture because food delivery is already an established business model. You’re not innovating if you’re just doing what others have already done. You’re only replicating.

What you have isn’t a startup unless it’s innovative, and you uncover distinct models in marketing.