Understanding Ries definition of Startup

Erik Ries defines a startup as:

"A Startup is a human institution designed to create a new product or service under conditions of extreme uncertainty."

[Eric Ries]

The  significant aspects of Ries definition are broadness, institution building, newness and extreme uncertainty.

Broadness

An important thing to understand over here is what Ries deliberately excluded from the definition, and that in fact made this definition really broad. Please note that the definition does not say anything about

• the size of the  company
• the sector of the company
• the related industry
• or technology 

Institution building

 A startup is an institution building. This institution building is an important part of the definition. This means as  as startup we are trying to create institution building when we don't know what we don't know. In other words startup is an institution building to cope up with conditions of extreme uncertainty.

Newness

  A startup is designed to create something new. The newness of the product or service is an important aspect of this definition. That is why if you open a new business that is an exact clone of an existing business, that can not be a startup.

Extreme Uncertainty

 Extreme uncertainty is the most important part of the Ries definition of startup. Startups are designed to face the challenges of extreme uncertainty. According to Ries the harsh soil of extreme uncertainty is the place where startups thrive.