Discussion issues determining the essence of a startup

Babitsky Roman
Postgraduate Student, Department of Business Economics and Business Organization, Odessa National Economic University, Odessa, E-mail: roman@babitskyi.com, ORCID ID: https://orcid.org/0000-0003-0201-6500

Ohrenych Dmytro
Postgraduate Student, Department of Business Economics and Business Organization, Odessa National Economic University, Odessa, E-mail:unicom98d@gmail.com, ORCID ID: https://orcid.org/0009-0001-5967-8807

Cite this article:

Babitsky R., Ohrenych D. (2023) Discussion issues determining the essence of a startup. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Dyskusiini pytannia vyznachennia sutnosti startapu; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 9 (310), pp. 127-134.

Abstract

The objective of this article is to examine theoretical approaches to defining the essence of a startup as a form of entrepreneurship. A key feature of startups is innovative entrepreneurship, leading to an exploration of types of innovations. As a result, various subtypes of innovative activities are proposed: technological innovations – introductions that involve substantial changes in the production process, leading to shifts in qualitative, consumer characteristics of a product, or its cost of production; marketing innovations – introductions that involve significant changes in the process of product positioning and promotion in the market (without substantial changes to the product itself); organizational innovations – introductions that involve significant changes in business management, manifesting in a fundamental shift in a company's business model (without substantial changes both to the product and its market positioning), which may involve, for instance, changes in the method of purchasing or consuming a product, subsequently resulting in a significant increase in its utility. Other essential features of startups are also highlighted: they are newly established or recently formed businesses; a substantial proportion of startups conclude their life cycle unsuccessfully; rapid economic growth; they represent a phase in the life cycle of innovative business; they operate under limited internal material resources and primarily focus on the development of intellectual capital. The study also addresses characteristics that, in the author's opinion, are unjustifiably attributed to defining the essence of startups: they do not necessarily operate online; they are not necessarily based on IT or other modern technologies; they are not a product but a business; they do not necessarily target the international market or are global in nature and sources of funding. The article culminates in the author's definition of a startup as a newly established business founded on innovations (technological, marketing, organizational) that is based on the extensive reproduction of intellectual components of capital (prosumerism).

Keywords

startup definition, types of innovation, intellectual capital, technological, marketing, and organizational innovations.

JEL classification: O310, M130; DOI: 10.32680/2409-9260-2023-9-310-127-134

UD classification: 658.5

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