Until a few years ago many people had never heard of Startup in recent times, however, this term has spread at an extremely fast speed and wherever you go you only talk about the famous StartupS.
Can you define exactly what a Startup is? To help you once and for all understand the topic and find out if this business model is for you, let’s explain each of the features of a Startup.
What is a Startup?
The term Startup refers to starting something, that is, getting things to work, but how does that apply to the entrepreneurship market?
This term, linked to the business world, appeared simultaneously to the “dot-com” bubble of companies between 1996 and 2001. This speculative movement increased considerably the actions aimed at information and communication technology companies associated with the Internet universe.
A group of people who work for an innovative cause with high growth potential is the first step for a business to be defined as a Startup, but it is not limited to that.
To gain Startup status the business needs to follow a business model with HIGH POWER OF GROWTH, with capacity to be REPEATIBLE and SCALABLE, besides having as challenge solutions to be developed and all this in a CLEAR OF INCERTLES, let’s explain each one of these terms below.
What is the business model of a Startup?
The business model is the way the company works in search of generating value, transforming work into money from the fulfillment of the following mission: solve the problem, or the pain, of the client.
One of the biggest challenges of a Startup is to create a business model that is innovative, since the focus is not only on the product, but on its value, and from there it is possible to measure how much your company satisfies your customer. People will only be willing to pay for products and services that they trust and believe will solve their problems.
What is the definition of Repeatable and Scalable?
For a company to be considered a Startup it is necessary to be repeatable, that is, to have the capacity to deliver its product unlimitedly, for this the model cannot require that each customer needs adaptations and customizations in order for the service to serve them.
Meeting this requirement depends on whether the product or service is always available regardless of demand or whether the same product can be sold multiple times to different customers.
Another need for a Startup is to be scalable, that is, to have the potential to grow more and more without interfering with your business model. Maintenance costs need to stay the same, or have little variation, while revenues need to grow more and more, generating high results.
Why work in an Uncertainty Scenario?
The uncertainty that revolves around a start-up is the risk you need to take, questions like who is my customer? how much to charge for my service? how to deliver my product? will be frequent, but if you are well prepared and equipped with all the necessary information, growth will be a consequence.
It is important to understand that the risks of the initial phase need to be measured, the little return can last some time, but you must know how to diagnose when the company is not generating the expected result and have the responsibility to close its activities and start from scratch, otherwise you are just being wrong.
Because of these risks, the entrepreneur who proposes to follow the Startup model must be prepared to remain in the period of low financial return of his new business and, above all, be realistic when defining the future of the company.
Are Startups just internet companies?
It is a fact that the Internet is one of the Startups’ major allies, because this business model needs high reach power both to win over its customers and to serve them as quickly as possible, and for this the Internet is a very efficient tool.
However, to say that a Startup is limited to this is wrong, your company can act in several branches and still be within this business model.
Examples of Startups
There are many ways we can segment the types of StartupS, however, the market follows the following model:
Small-Business Startups: They are managed by entrepreneurs with little experience and very limited vision. They control their own business, which is often familiar, and they don’t have much interest in growing. However, in the local market, it generates movement.
Scalable Startups: Refers to a business model has great potential for growth but needs investment to take off. In that case, it is most likely that at that stage the venture will be sold to investors.
Lifestyle Startups: This model is driven by the dream of its creators, it aims to generate income, but without failing to meet the personal tastes of its managers.
Buyable Startups: It is an innovative idea, but one that requires risky investments to be made to realize it and move forward with the business model.
Social Startups: This business model aims to make a difference in the world, helping other people or businesses to generate results that impact society. In this case, it may be a non-profit company, but not exclusively.
Large-company Startups: In the case of companies that are already in the market and need innovation to reinvent themselves, trying to adapt from new models such as StartupS can be a way out.
If we stop to think about it, many companies, which today are large, have emerged as a Startup, that is, in a scenario of uncertainty, with little or no investment and innovative ideas.
In the current market, it is possible to predict an increase in the emergence of new innovative business models, and thus the need for adaptation and increased competitiveness will be decisive factors for the success of an enterprise.