What Is A Startup: Definition, Characteristics And Their Types
The term “startup” has gained a lot of popularity these days. More and more individuals are interested in becoming entrepreneurs and therefore open their own business. Therefore, there are also more entities interested in helping new businesses.
Although its presence in today’s society is notorious, this concept still raises some uncertainty about what it really means and what it represents.
But what is a startup anyway?
The first thing you must understand about startup is that there is no precise definition about this concept, since this meaning is quite comprehensive.
Second Neil Blumenthal, Cofundador that will co-CEO of Warby Parker:
“A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed”
Although this statement is correct, it does not define the whole philosophy behind this concept. For this reason, the following set of features that all startups have in common.
a business this type need to have a differentiator competition in order to gain competitive advantage in the market. It is innovation may be present in their products or in the business model associated with company.
A innovation plays an essential role in the success of a startup, so all entrepreneurs should seriously consider this aspect.
An startup is new company which is still in early stages brand management, sales and hiring employees. Too often the allocation of this concept to Business who have been on the market for less than 3 years, however, this is not true. That is, one company You can have 7 years and is still a startup.
Stop being a startup it depends not only on your age but on a specific set of features.
An startup is company whose goal is grow and expand rapidly, taking up to sometimes drastic proportions. This is one of the points that distinguished startup a Small business.
Once a startup It has shed innovative strongly present, there are always several associated uncertainties about ensuring the success of the business. For this reason, these Business are considered risk investments with a high failure rate.
An startup is very dynamic and ready to adapt to the adversities that may arise. Due to the need for validation of your business idea, these Business need to be ready to tailor their product to meet customer requirements.
This feature It is also present in the business model as there is a need to find a sustainable business model.
Solving a problem
Associated with your shed innovative, this Type of company focuses on solving any existing problem in the market. So they focus on making a difference not only in the marketplace but also in people’s lives through your product or service.
An startup is company in constant search of a business model that is scalable and repeatable, that is, it can grow without the need to increase human or financial resources.
These Business they are usually made up of very few people. Although not the only determining factor for the designation of startupIt is quite common to define it in your working team there less than 100 people.
In short, we can consider that a startup is a company that is in the early stages of development in order to solve real-life problems through a product or innovative service.
Does a startup have to be technological?
This is a very common issue in the world entrepreneur. The connection between this Type of company and technology comes from the 1990s because the type startup more common in “dotcom” companies.
Although much of the startups existing at present being technological in nature, the concept is not unique to them. The essence of startup It is looking for innovative ideas that drastically reach a large number of people.
Types of startups
After clarified the question of what is a startup, it is time to identify the various types of businesses that they can present. Due to the increased demand in this market, it is necessary that future entrepreneurs know that types of startups exist and in which your idea fits.
According Steve Blank, a reputable entrepreneur of Silicon Valley, exist 6 different types of startups:
founded by entrepreneurs They are working for themselves what else they like. Examples of these are freelancers or web designers who have passion for their work.
Small Business Startups
Small business where the owner follows less ambitious goals, to provide only a comfortable life for his family. Examples of these are hairdressing salons, grocery stores, bakeries, among others.
founded by entrepreneurs who believe from the beginning that can change the world with their business idea and therefore worry about finding a model scalable and repeatable business in order to draw the attention of investors to boost your business. Examples of these are Google, Uber and Facebook.
These Business they are born with the goal of being sold to large companies after achieving positive results that catch their attention. This one type startup It is very common in web solutions development companies and mobile. An example of this was the purchase of Instagram by Facebook.
Large Company Startups
These Business They have the main objective of innovation and have a limited duration of life. At Business fall into this category develop products or services that revolutionaries become quickly recognized by the market. However, due to market changes, the user preferences, competitive pressures, these Business They tend to create new innovative products for new users of different markets.
Finally, there Business whose entrepreneurs They want to make a difference in society and make a better world. Thus, the main objective is not to gain profit, but rather to contribute positively to the community. One example is the charity or charitable institutions.