Have you ever wondered what a startup is? Currently, a lot is heard about this new business model that has been so successful and achieved high investments.
All this highlighting, however, is justified. Since they have increasingly dominated the market, always with innovative proposals, a young spirit, and thoroughly adapted to digital transformation trends.
Anyone can kick start to create a startup, of course, if the main requirements are met. They are very different, for example, from newly opened small businesses, and a lot of that is related to the expectation they generate.
How about understanding more about startups and discovering why they have been so successful? We will talk a lot about it below!
Table of Contents
What Is A Startup?
Startups are beginning companies with a young approach and adapted to the digital model, so essential requirement nowadays. Although they are small, they bring innovative proposals, either for products or services.
A ubiquitous question is with the success of startups. Few people understand how they stand out so much, even just launched on the market, but that has an explanation.
The proposal of startups is precisely to generate impact through something new and with great potential for development. They are ideas with a good chance of success and, if they succeed, they have everything it takes to be leaders and great players in their markets.
This flashy start attracts investors’ attention, which is a crucial point when talking about startups.
Many entrepreneurs start these businesses in search of investments for their ideas. It is a widespread practice for this type of company.
However, this financial contribution only occurs if the proposal is truly differentiated, without any precedent in the market, and with exciting longevity prospects. It draws the attention of investors, who trust these new proposals.
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Does The Startup Carry That Label Forever?
It is a common question for those who want to know what a startup is. However, this classification is only given to newly founded companies, and that will still have their activities proven in the market.
If market stability is achieved, obtaining recognition naturally ceases to be a startup since it reached its primary objective.
What Are The Characteristics Of A Startup?
To understand what a startup is, it is essential to look at some fundamental characteristics of this type of company. They will help you better visualize the business model we are talking about, and you can even remember some that are already on the market.
Startups are scalable; that is, they have a wide possibility of growth, doing this without consequences for their operations.
This scalability generally occurs because they are companies with native digital operations. Thus, your services and products can be delivered to more and more customers without requiring more effort or even mandatory investments.
This characteristic means that the same product or service can be offered on a large scale, without any limitation. For this, it is vital that what the company provides is not very flexible or adaptable.
The proposal is to multiply and reach more clients. So accommodations could get in the way of those goals.
Innovation is the main characteristic of startups. They bring services that were always necessary but that were never thought of until the company came to light.
The same happens with products, which serve as accurate solutions for the different demands of society. Innovating is the first step for a company that wants to launch as a startup.
By bringing something different to the market, these companies also do not have a well-defined direction for success.
Despite being solid proposals and an excellent opportunity to have good results, there are no precedents that help to have a clearer perspective of the future.
Disruptive startups break patterns usually used by other companies in the same segment. It comes through customer service forms, collection rates, and even in the mode of provision of services.
The proposal is, precisely, to flee from what the market offers, stand out and have the necessary competitiveness.
The main characteristic was observed in the early 2000s, in Silicon Valley, when the term startup began to be used to classify certain companies.
Most of the time, companies inserted in the digital entrepreneur’s context have their action on the Web, dispensing physical points and the need to travel to attend and make any other request. Typically, they are 100% digital businesses.
What Differentiates Startups And Small Businesses?
In the search to know what a startup is, so many people wonder about the difference between them and the small companies that are also launching in the market.
Despite being a pretty reasonable doubt, there is a fundamental conceptual difference that makes startups different: they bring innovation to a specific market.
If you open a hostel, for example, it is just one more model of accommodation establishment.
On the other hand, if you launch an application that connects people looking for a place to stay with those who want to rent their residence or a room, there is an innovative idea.
In addition to bringing something new and never seen before on the market, there is the fact that it is entirely digital.
What Startups Serve As Good Examples?
How about meeting some successful companies that fit into that ranking? There is no better way to understand what a startup is!
Meet some world-famous ones that you are probably already familiar with and have already come across advertisements, or even use some of their services!
Airbnb has made it possible for people from all over the world to open their homes to receive travelers from the hospitality branch. If you have an unoccupied property or an empty room, it is possible to host someone for a specific time, generating profits with that action.
The company acts digitally, through its application or the website. The profit comes through the fees charged on each rental!
Despite considering itself just an IT company, Uber has become one of the transportation giants. The same Airbnb format connects private drivers to career-seeking passengers across the city, anywhere in the world.
Its emergence generated great competition with taxis, giving the public one more option, which ended a decades monopoly.
Spartan is a Brazilian company that has launched a platform aimed at those who want to organize and promote events. Through his solution, anyone can take care of various stages of the organization.
The software allows you to sell tickets, manage confirmations and work on all the control through the application and its workspace for the Web.
When illegal song download sites were being hunted down, Spotify came up with a solution: a streaming platform in which its users pay a monthly fee and have access to a massive selection of songs.
Thus, Spotify was consolidated, and, even winning several competitors, it continues to be the largest company in its segment.
How To Start A Startup?
A startup can run by anyone as long as the key steps to get start are follow. From the idea to the investment search, all are essential. Could you get to know each of them better now?
Have An Innovative Idea
Do you have any ideas that might work? If so, great! If not, it is not yet the time to think about a startup. They revolve around innovative products and services.
If you usually have good reflections and are attentive to the services that can work, you will come up with incredible ideas sooner or later. Stay tuned!
Starts In Testing Phase
Each startup starts from a prototype phase, in which the business model is test within your target audience but in a reduce sample.
Launch this basic version (better known as Minimum Viable Product) and see the results you get while still analyzing the public’s reaction to it.
Evaluate The Possibility Of Moving Forward
The testing phase will bring the answers you were looking for regarding the viability of your idea. If the business turned out to be reasonable and performed well in this initial moment, that may be the necessary seal to continue with your startup idea.
Based on these tests, it is also possible and vital to make adaptations to arrive at your company’s final model.
Starting alone is always very difficult. Companies need different skills to get ahead, so you will indeed have to turn to a partner, that is, a future partner.
Look for trustworthy people within your network and who have complementary skills to yours. It ensures the efficiency of your startup when it goes to market.
Attracting investments is a fundamental part of the work of a startup. Prominent entrepreneurs, mutual funds, and other companies generally have an interest in investing.
Solidly present your idea and keep an eye out for opportunities to have those contributions.
Now you know what a startup is, and you can start putting your idea into practice! Keep an eye on the characteristics of these businesses so that your idea works well. Use the tremendous successful companies as inspiration and go for your goals!
To begin, we invite you to learn a little more about the subject. Discover what the concept of Lean Startup is and how it applies to a company. Enjoy it!
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