Published in For Teams

What is a startup, and what goes into launching one?

By Alyssa Zacharias


6 min read

Entrepreneurs generally fall into three categories: freelancers, small business owners, and those who launch startups. 

These are all people who want to increase their earnings, pursue a vision, fulfill their leadership potential, or all three. But launching a startup might be the most intensive, and potentially rewarding, option. Here’s what sets it apart.

What’s a startup company?

A startup is an early-stage business that aims to offer an innovative product or service. Unlike small businesses that project slow but steady growth, startups scale quickly. You might associate the term with tech companies (think Shopify or Uber) because they innovate, rapidly meet demand, and, when successful, skyrocket. 

Since startups aim to deliver a product or service to the masses quickly and well, they need capital — often lots of it. Many entrepreneurs seek investments, business loans, or business grants as seed money when launching. Funding a startup is just as important to the process as developing the product itself, because that’s what helps the business scale so quickly. 

Startup companies can pose exciting returns for entrepreneurs and investors, thanks to their high-risk, high-reward ethos. But entrepreneurs can’t let excellent prospects overshadow risks — 20% of startups fail after just one year. Success requires determination and delicate attention.

The two types of startups

Many people launch startups to fulfill the dream of bringing an excellent business idea to life. This means they’re often passion projects that founders hope to see through and continue leading. But some view startups as an investment — an asset to grow and later sell. Here’s a bit more on the two models:

  1. Scalable startups — traditional startups that aim to get a product or service to market quickly, and scale the company exponentially, fall into this category. Entrepreneurs following this model have an idea they believe will take off and provide returns for themselves, their employees, and investors.  

  2. Buyable startups — in this model, entrepreneurs start a business with the intention of selling it early on to a larger company. Tech companies often inhabit this category. Think: a social media giant buying a burgeoning but popular platform. 

How do startups work?

Startups work like any other business. They start from scratch, scale up, and (ideally) grow into a full-fledged company. But instead of creating a business similar to existing ones, startups work by fostering new ideas that have the potential to shake up the market with an innovative,  one-of-a-kind offering. They’re doing something nobody else is doing, which in theory makes them uniquely profitable.

While a small business, like a gourmet grocery store, may feel like a startup to the owner trying to grow their reach and income, it’s a different concept. It’s a type of business that has existed for a long time, and in many iterations, so it doesn’t fall into the same category.

How long is a company considered a startup? Estimates say three to five years, but there’s no correct answer. Once a company is no longer a “fledgling,” it’s no longer a startup — whether that takes 12 months or more than five years. This could mean it starts earning huge profits, acquiring other startups, or hiring hundreds of employees.

The pros and cons of startups

If you’re considering launching a startup, or even just working at one, you’re likely passionate about your idea and enticed by the potentially high rewards. These two points are pros for participating in this type of venture, but just like any risky endeavor, there are cons as well. 

Here are a few other pros to startup culture: 

  • Startups are fun — many have heard the tales of startups with slides instead of stairs, nap pods, and kombucha on tap. While this isn’t always the case, startup culture tends to lend unique benefits and a relaxed, all-hands-on-deck, generative attitude in the office space. 

  • Employees make a difference — anyone at a startup could have the next big idea. As innovative operations, startups look for excellent suggestions and encourage creativity instead of limiting employees to routine tasks. Company standards are always in flux, and it’s exciting to think you could contribute.

  • There’s networking potential — the startup community is tight-knit, and through the process of talking to investors and other founders, you’ll meet interesting people who are just as innovative as you.

And here are some cons:

  • Everyone wears many hats — as many startups are lean operations, one person may cover several tasks, and responsibilities aren’t always clear. While taking on more tasks is stressful, you could also categorize this point as a pro. You’ll learn new skills and gain insights into various parts of an operation if you can prevent burnout and stay on top of everything. 

  • You might work long hours — forging a dream is no easy task, and startup founders and employees may pull long hours. This is especially the case in the early months when there are few workers with lots to do.

  • It could fail — to launch, or even work for, a startup requires investing time and money. It might feel like you’ve wasted those resources if the business fails. 

How to build a startup

If you have a winning idea to fill a hole in the marketplace, you’ve already taken the first step toward creating a startup. Now you can try the following steps to set your dream into action:

1. Write a business plan 

Create a document that contains your mission statement, notes from your research on your target audience and competition, and brand guidelines. Add information about your operational procedures and the people responsible for specific tasks. Close out with financial projections and statements — information that’ll prove essential when approaching lenders and investors. 

2. Secure funding 

As startups often need capital fast, funding is essential to the early foundational stages. Startups may seek “bootstrapping” funds from friends and family members, and seed money from angel investors, loans, and donations through crowdfunding sites like GoFundMe. 

At a larger scale, venture capital companies run intensive funding rounds, raising more significant sums pushing into the millions. Remember that many investors and banks will only offer to fund legally established companies, so fulfill all your registration requirements before you start seeking capital. 

3. Form a team 

Once you have the resources to do so, hire employees to cover the operational essentials. The type of offering and size of your operation will determine the roles you need to fill, but startups generally have a chief executive officer (CEO), chief operations officer (COO), and, if it’s a tech company, a chief technology officer (CTO). 

Other typical roles include engineers, product managers, and salespeople. You’ll also likely need human resources and accounting support as you scale. No matter which positions you must fill, you should hire people who share the company’s passion, are innovative and growth-minded, and understand the pros and cons of startup work. And don't forget to get an employer identification number (EIN).

4. Launch 

Before launching your business to customers, establish your online presence by setting up a company website and social media accounts. You’ll also use these spaces to promote your product or service through content marketing, a mailing list, or social media calls to action (CTAs). 

No matter what you’re selling, you should have secure platforms to receive leads and transactions. Customer relationship management (CRM) tools and ecommerce hubs offer safe places to store customer data, track engagement and sales, and fulfill orders. 

Once you’re ready to take your first purchase, download, or client lead, you can launch. Use your social media accounts and website to let your audience know how they can access your product — via their phone’s app store, on your ecommerce site, or by getting in contact with your team directly. 

Startup success stories

Around 65% of startups fail within 10 years of launch. It’s an intimidating number, but remember there’s still a sizable percentage that succeed. Turn to the startups that got off the ground for context and inspiration. The following household-name companies started small, but their grit and revolutionary ideas helped them become profitable. 

  1. Uber — ride-share company Uber has an origin story that proves the importance of meeting a need. The founders couldn’t hail a taxi on a cold Parisian night and dreamt up the then-groundbreaking solution of ordering a car from a phone. That need sparked a tech giant and filled a market gap.

  2. Airbnb — Airbnb started with just two hosts and three guests. The company’s now 4 million hosts have welcomed over 1 billion travelers, and Airbnb has a presence in most countries worldwide. The niche concept of bolstering accommodation options other than hotels and inns, especially during seasons with high tourist traffic, made the startup a winner.  

  3. Meta — Facebook isn’t just a household name. The startup’s inception is practically a household story of Silicon Valley success. Mark Zuckerberg started the tech conglomerate when he was a Harvard student. Facebook, what was once a digital hub for students, became the multi-hyphenate tech suite Meta. It’s now an industry leader when it comes to social media and innovative tech.

Start strong with help from Notion

Launching a startup means developing a business from scratch, and that takes foresight. Use Notion to incubate an idea, create a plan, and launch a brand all in one place. 

With organized templates and guides — like Notion’s startup-in-a-box boilerplate — entrepreneurs can learn how to plan operations, write a company profile, and ensure they’ve ticked off all the essential boxes for starting a successful business.

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