One word has gained a lot of prominence in recent years when it comes to innovative businesses: startup. But do you really know what this business model means? What is a startup and how to start one?
The Internet has come to revolutionize everything: the way we communicate, organize our daily lives and consume, including the way we do business!
Previously, the idea of starting and having a business or company seemed possible only for those who had a large capital.
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But, the invention of new technologies and has allowed anyone to make their dreams come true through startups.
In fact, some large companies, such as Amazon or Facebook, began as startups and today have become great references in all over the world.
Do you want to understand what a startup is and how they work? Read this post to the end and find out fifteen successful startup!
What is a startup?
Startup is a term in English that is used to define companies that are still young or newly created and have great growth potential.
The origin of startups dates back to the mid-twentieth century (1950), in the United States, more precisely in California, in the area known as .
It is very likely that you have already heard of this place, but if you do not know, it is an important technological center where many of the big global companies are located, such as Google and LinkedIn.
The idea of startups spread throughout the world, gaining more strength from the 1980s.
Before talking in depth about the characteristics of startups, we are going to point out the difference between this model and a traditional company (SME).
Differences between company and startup
1. Exponential growth
A startup is characterized by being a scalable business and growing much faster and more efficiently, compared to traditional small or medium-sized companies.
2. Objective
Although any company intends to deliver a product or service, startups are born to effectively solve a major problem or pain in society, in a simple and creative way.
3. Business model
This is a fundamental difference, because while a traditional company uses already known and proven business models, startups seek to create new ones, which causes many to fail and not make it through the first years of life.
4. Processes and systems
Startups work with greater agility in decision making and process execution.
5. Scope of development
In general, startups belong to the area of technology, or at least use it to deliver their solutions.
6. Financing
Small and medium-sized businesses enter the market after investing a certain amount of money and often have to wait a while to start making a profit. For their part, startups do the opposite, they enter the market to seek capital and use digital technologies to grow and find financing.
It is very likely that a startup will become an SME when it is more established. This transition is defined, among other factors, by the life time, the stability in the processes, the profit obtained and the long-term sustainability of the company.
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Characteristics of a Startup
1. Young
Yes, many people make the mistake of considering all small and medium-sized businesses to be startups, but things don’t exactly work that way.
Startups are characterized by being young companies that have two options:
- Evolve and become successful companies.
- Close the doors.
2. Scalable
The is one of the main attributes of startups. That is, its ability to grow and generate income much faster than its cost structure.
In other words, a scalable business is one that is capable of increasing its production and sales without having to increase its expenses. Therefore, your contribution or profit margin grows significantly.
This means that startups do not necessarily have low profits because they are small. On the contrary, these companies are capable of generating very high profits.
3. Technological
As we saida startup is a new company that has a strong relationship with technology.
In general, they are characterized by being businesses with very innovative ideas and a great disposition to satisfy the needs of the market.
New entrepreneurs and startup creators depend on technologies to grow and even find financing through Internet platforms.
In fact, the report carried out by the company Telefónica, shows that 80% of startups have an engineer among their founders.
4. Economic
Startups are characterized by having fairly small costs, compared to their profits, which tend to grow significantly.
For example, companies like Amazon, Apple, Google or Microsoft started in the homes or, better said, in the garages of their founders.
Its main premise is to keep costs low in order to obtain benefits much faster.
5. Disruptive
Look: all the most successful startups in the market broke the patterns of traditional companies in their segment.
Whether in the way of serving the public, in pricing or even in the way the service is delivered, startups try to get out of what the market already offers to stand out even more.
6. Innovative
The is the keyword of any startup. These companies seek to offer creative solutions for demands that have always existed, but that the market did not take advantage of.
Examples of successful startups
Now that you know what a startup is, we are going to show you some examples of great companies that started out as startups and that, today, have become a true source of inspiration for many .
1. Uber
This transport network, which connects passengers with drivers through a mobile application, began in 2008 with the idea that users could order a car with just one click on their smartphones.
Since then, Uber has become popular on all continents and today has 15,000 employees worldwide and a value of 50 billion dollars.
In addition, it has expanded its business model with proposals such as Uber Eats, an application for ordering and delivering food between users and establishments.
2. Airbnb
This company started as a startup serving the demands of a market that needed to connect homeowners and travelers.
Currently, Airbnb is present in 192 countries and 35 thousand cities around the world. In addition to having a privileged position in the ranking of the most successful startups of the moment.
3.Spotify
Are you one of those people who turns on the computer or grabs the mobile phone and the first thing you do is open Spotify to listen to music?
So, we bring you good news! Spotify started as a startup of two friends passionate about technology.
In 2008, Daniel Ek and Martin Lorentzon launched the first version of Spotify, with the goal that people could listen to music how and where they wanted. Access at first was by invitation only.
Currently, Spotify has a catalog of more than 35 million songs and has reached 365 million active users.
What is needed to start a startup?
If you already have enough inspiration, it’s time to get down to work and start your own business.
Next, we have gathered the main tips to help you create your own startup. Discover them!
1. Think of problems that people need to solve
Startups seek to solve problems and offer innovative services in the market.
For example:
Uber started because its owners were frustrated every time they needed to order a taxi in the city of San Francisco. In other words, they had the same problem as thousands of people: the lack of urban mobility.
If you are thinking of creating a startup, you must think about the real needs of people.
Do some research on the market, observe and open your mind to understand what are the problems that people need to solve. You will surely find some that they are worth it.
2. Look for creative and practical solutions to these problems
Startups, in addition to being characterized as profitable businesses, are known for offering creative and different solutions to problems.
It is not about looking for outlandish or unimaginable solutions, but about thinking of simple strategies, but that nobody has put into practice before (or has not done it well enough).
Going back to the example of Uber, it may be that, at first, some people thought it was crazy to offer a particular transport service. After all, the taxi is exactly that.
The great differentiating element of Uber was being able to innovate in a crowded.
The solution for the lack of urban mobility already existed. What this company did were small changes that made the private transportation service more attractive to consumers.
3. Think of solutions that are scalable
As an entrepreneur, you need to opt for solutions that have strong growth potential and are capable of increasing profits and revenues without the need to reinvest in infrastructure.
For example:
If you develop an application for smartphones, you will have the work of creating it only once and many people will be able to buy it without you having to invest more money or work (except for eventual updates).
Also, it is important to think about global scalability. In other words, think of solutions that can be applied in other parts of the world and not just in your country or city.
4. Use technology to increase the value of your service or product
Technology came to make life easier for us and this is something you cannot miss out on. So use the technological resources available to offer a better service or product.
Do you want some advice?
You must have already realized that nowadays almost everyone walks around with a mobile phone in their hands. How about thinking of a service that can be used through a smartphone?
You not only use technology to offer something better, but also to scale your business, since the probability that the public will have your service or product at their fingertips at all times will be much greater.
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5. Set your goals and deadlines
Like all businesses, a startup must have its short, medium and long-term objectives very well defined.
If you have partners or if you plan to start a startup on your own, spend time writing the expected goals with their respective deadlines. This is very useful for maintaining order and focus on the project.
And do not worry! Over time, you can change them. It is something normal, mainly for those who are creating a startup.
The important thing is to have…
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