As new technologies revolutionize how we see the world and work, entrepreneurship is changing, giving rise to startups. Here we tell you what startups are all about.

New companies spring up every day to offer products and services, especially in agriculture, telecommunications and energy. However, companies called startups stand out from the rest for how they harness information and communication technology (ICT)

What is a startup?

A startup is a new company with a high growth potential owing to its scalable business model and use of new technologies. Startups have gone from strength to strength in recent years. According to Statista, the number of fintechs (finance startups) in the Americas had risen from some 5,700 in 2018 to over 10,700 by the end of 2021. Europe, the Middle East and Africa alone are home to more than 9,300 fintechs. 

Many people think startups and SMEs (small and medium-sized enterprises by virtue of their headcount, turnover and other things) are the same — but they're not. 

Here's how startups differ from SMEs:  

• Early stages: As emerging businesses, they have no track record or market positioning (which is not always true for SMEs).
  
  
• Innovation: Though both can use cutting-edge technology, startups base their business models solely on innovation and mainly turn to tech for competitive advantage.
  
  
• Scope: Startups usually think big — even global; but SMEs tend to stick to local markets.
  
  
• Scalability: Startups seek to scale up and boost revenue quickly, without increasing costs. But SMEs are run-of-the mill businesses with a linear pathway, so they tend to have a greater survival rate.
  
  
• Lower costs: Since startups don’t require a lot of capital to set up and run operations, they’re able to increase their profit margin and grow quicker. Many don't need a formal workplace (especially in their infancy), and even opt to do business from co-working spaces (where occupants share offices but not necessarily professions).
  
  
• Funding: While SMEs raise little to no external capital, startups make funding from investors a priority. That’s where the so-called “angel investors” come in, who invest in startups and have a say in their management in exchange for equity.