Of the terms that were not so popular even a decade ago but are finding place in everyone’s vocabulary in recent years, Startup is definitely one. In today’s business world, startup is a common word that we often get to hear, without a complete understanding of what it exactly means. To be precise, a startup is a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market. By its nature, a typical startup tends to be a shoestring operation, with initial funding from the founder or their friends and families. In the early stages, startup companies have little or no revenue coming in. They have an idea that they have to develop, test and market. While entrepreneurship refers to all new businesses including self-employment and businesses that never have the intention to become registered, startups refer to new businesses that intend to grow large beyond the solo founder.
FEATURES OF A STARTUP COMPANY :
It is indeed difficult to enumerate a few specific features of a startup company because revenues, profits and employee numbers largely differ among companies and industries. However, there are certain common traits that differentiate them from a small business.
• Tremendous growth – Startups are businesses which are designed to scale incredibly quickly and it is this focus on growth and rapid scale that differentiates them from small businesses. There is often a distinct lack of stability.
• Innovation – Startups are involved with innovation, new ideas and using technology to create something that addresses a problem. They often disrupt the existing markets like Airbnb ( hotels ), Uber ( taxis), etc.
• Age – Startups are generally young because in most of the cases, after being three years in business they cease to operate as startups. This happens mostly when a company is acquired by a larger company, the company has employed over 80 people, it has set up multiple offices, etc. However, there are no fixed rules and a company which is five years old can still be a startup.
• Tech oriented – By definition, a startup need not be tech-oriented, but in reality they often are. Startups often use technology to solve problems and the ever-expanding public access to that technology, enables a startup’s quick growth.
HOW TO FORM A STARTUP? :
In case of a startup, the founder is a very important entity. Startups are typically started by a founder or co-founder, who have a way to solve a problem. Founders go through a lot to set up a startup. Many institutions and universities provide training on startups. Startup courses are found both on traditional economic or business disciplines. A startup requires a lot of patience and resilience and training programs need to have both the business components and psychological components. The founder of a startup will begin market validation by problem interview, solution interview and by constructing a minimum viable product ( MVP) or prototype in order to develop and validate their business models. The startups process can take up a long period of time, at times even three years or longer and hence sustaining effort is required. Since there is a lot of uncertainty involved it is better to ensure certain things before you get up your startup off the ground –
• Make a proper business plan. • Secure appropriate funding. • Surround yourself with right people. • Find a location and build a website. • Learn about marketing. • Build a customer base. • Be prepared to handle any unforseen problem.