So what falls under the definition of a startup?

If you have a passion for sports and work out every day, wear sportswear all the time and have an idea to open a small store selling sportswear, does that fall under the definition of a startup?  No not really, that would be a small local company where local is the key word. In the book Zero to one a startup is described as a small group of people with a mission to change the world. You can start local but the idea needs to be scalable. The founders need to have a desire to change how the world works.

According to Bala business experience and a business degree are not advantages of an entrepreneur. He went so far as to call it a disadvantage as startups are counter intuitive meaning that you intuition of what is right is not right when it comes to startups. I cannot completely agree with Bala on this matter as experience in running a business or knowing how the market works can be an advantage when you have your startup up and running. Knowing that startups are counter intuitive you can be carful of letting your intuition, which has been shaped by business school and other experience from normal businesses, get the better of you. As startups are counter intuitive you should get a mentor that has started their own startup. You should listen to your mentor even though your intuition tells you that this is crazy and would never work. However you should not take the advice without thinking of how it can be adapted to your idea.  

If you see the value in doing something that everybody else thinks is stupid then it is likely that you have a good idea for a startup. You cannot predict beforehand if your startup will be a success as no one has done it before. If there is only one it is impossible to find a pattern and predict the future like we do with other non-counter intuitive things. In the documentary Something Ventured the story of Nolan Bushnell is told, when he took the first Pong game to the toy fair in New York. No one wanted to invest and everybody thought the idea was stupid. Finally a venture capitalist took the change and invested. Now videogames account for about third of the entertainment spending in America.  

Something ventured goes through many other successful startup ideas that later became companies that changed how the world works, Apple, Intel, Genentech along with other IT companies. Before 1957 you needed to be a part of a wealthy family or have collateral to be able to finance your idea. Arthur Rock, the first venture capitalist, helped the traitorous eight raise the capital needed to start Fairchild Semiconductor, a company that laid the path for the high tech world we know today. Venture capital is crucial for startup companies as they are more willing to take the change on ideas that no one else believes in and others only see as risk.

So to take it all together, startups are counter intuitive and if you have a good idea it is highly likely that no one will believe in it and it will be extremely hard to get financing. Therefore it is important that you believe in your idea, that it is something that you are passionate about and are willing to give it your all.