What is a Startup?

In the past couple of years start-ups have become what marketing was in the nineties, financial industry in the eighties, or rock'n'roll bands in the sixties, that is, what the cool kids do for living. No wonder than that everybody and her sister have started to use this term for anything that even remotely looks or sounds like a startup. To avoid the watering down of the term we should all be more careful in using it and the first step in that direction is to provide a detailed, yet simple definition. And the best definition of a startup comes from the father of Y Combinator Paul Graham who said

a startup is a company designed to grow fast.

The three essential ingredients of a startup are therefore "company", "designed", and "grow fast". Consequently an idea that wasn't incorporated as a company is just an idea, not a startup yet. Similarly, a company which is experiencing high-growth through luck or exceptional talent of its founders is not a startup yet, though such companies are the prime targets for venture capitalists to get involved and make proper startups out of them. Finally, a company whose founders have no desire to create a company which would outlive them, whose owners feel no pressure to make a big exit with multiple return on investment, whose employees are perfectly fine by living on a regular paycheck for the rest of their lives, and whose target market is less than 100 millions dollars in size or not growing, shouldn't be called a startup. Only when all pieces of Graham's definition are in place, we can talk about a proper startup.