At StartupBlink, we evaluate startup ecosystems around the world, with a close focus on the quantity and quality of startups. To compare locations fairly, we need a precise definition of what a “startup” is, and what it isn’t. The word has entered everyday language thanks to globally successful tech companies. It can be inspiring (garage to global) and polarizing (questions around Big Tech). Clear criteria help cut through the noise. If you need location comparisons, industry trends, or tailored datasets to guide decisions, our Startup Ecosystem Pro Research Membership gives you access to 1,500+ ecosystems, 200,000+ startups and organizations, and up to 10 hours of custom research by our team. Members use it to choose expansion locations, benchmark peers, and track corporate innovation. Defining “startup” A startup is a young, innovative company built to scale. Innovation can be technological or a new business model that is clearly better than what exists. Scalability means the economics allow rapid growth without costs rising one-for-one with revenue. Startups operate under uncertainty, test quickly, and aim for impact beyond a single neighborhood or city. Funding sources do not define them; innovation, scalability, and intent to grow do. When assessing companies for inclusion on our map, we look for real distinctiveness, strong product and user experience, and evidence that the solution can serve national or international markets, not just a local client base. A mobile app can be relevant when it is the natural interface to the product. We value early traction and clear plans for expansion. Investor backing from angels or VCs can validate the growth path, but bootstrapped companies qualify when their metrics show momentum. We also apply pragmatic flexibility in developing markets, where teams can prove ambition and scalability even if early signals differ. Country-specific domains are acceptable; we simply look for signs of global ambition alongside them. The 4 Key Characteristics of Startups Startups share a few defining traits that separate them from traditional small businesses. These characteristics shape how they operate, scale, and respond to uncertainty, and they explain why some teams break out while others stall. Below are the core elements that consistently signal a true startup. 1. Small Size, Big Impact Emerging startups usually begin their journey with a small team working on a minimum viable product (MVP) or an initial prototype to test whether their idea offers real value to users and has the potential to scale. At this stage, the goal is simple: validate assumptions, understand the market, and prove that the solution solves a meaningful problem. Only after showing signs of traction, even small ones, can a startup attract additional customers, investors, and partners to support its next phase of growth. It is widely accepted that an early-stage startup is typically a small business in terms of team size. However, being small does not automatically make a company a startup. The defining difference is the intention and ability to scale. Startups aim to build products or services that can reach large markets, grow rapidly, and create disproportionate impact compared to their size. To achieve this, startup teams must remain extremely flexible, iterate quickly, and adapt faster than traditional SMEs. This allows them to respond to technological shifts, competitive pressure, unexpected failures, and new opportunities with speed, a characteristic that continues to differentiate successful startups in today’s environment. 2. High Risk of Failure Startups operate under a high risk of failure, largely because they begin with limited resources, untested assumptions, and business models that are still being shaped. Eric Ries, author of The Lean Startup, defines a startup as “a human institution designed to create a new product or service under conditions of extreme uncertainty,” and that reality hasn’t changed. This uncertainty is one of the main reasons early attempts often break down. Still, failure is not a final outcome in the startup world, it’s a learning point. Each setback helps teams refine the product, correct assumptions, and adjust direction. For startups, encountering failures is natural, and using them as fuel for improvement remains one of the defining behaviors of successful early-stage companies. 3. Being a Talent Bank Attracting and hiring talented people with diverse backgrounds who can handle pressure, learn quickly, and stay focused through challenges is essential once a startup begins to take shape. A strong team should be formed around motivated individuals who genuinely identify with the company’s mission and culture. Team members should feel that their work creates real va