Even with the economy picking up steam, traditional employment opportunities are drying up. The startup industry, on the other hand, is booming. But what are startups exactly? What’s fueling this growth spurt? And how does one go about starting their own company?
This blog post https://crunchtimenews.com/ will answer all these questions and more.
A Startup Is A Company In Launching Mode
A startup is a company that’s in the process of launching itself. It starts with an idea for a product, service, or business and moves towards a product launch.
A startup is a company in the midst of deciding how to go about launching its product, service or business. This can happen many times during the life cycle of a startup.
It may launch and then change directions, or it may float around in concept and direction before finally becoming a full-blown business.
For example, Hubspot is well over 10 years old now. These days it’s a software company but in the beginning, it was a blog.
Startups Must Be Disruptive To Be Successful
The reason why startups are so successful is because they provide unique value to the customer or take away significant pain from the customer.
They are innovative in some way – either the market that they target or the way in which they target that market. You don’t see companies like Google suddenly spring into existence by providing mediocre service to an existing market – there already exist plenty of mediocre service providers who can do that (and have been doing that for years).
Google’s search engine was very different from all the other search engines in existence. It was more accurate, faster and provided a better user experience in several ways. This made it disruptive to the market and a very successful company.
The main difference between an established company and a startup is that an established company targets an existing market with its product or service whereas a startup targets a non-existing or non-mainstream market with its product or service.
Startups are also heavily based on technology, whereas established companies are not always reliant on it as much as startups are.
A startup exists to solve a problem and/or provide better ways of doing things, whereas an established company exists to make money.
This is why you don’t see established companies coming out with innovative products every 5 years or so. There’s no need for them – they already have a customer base and market share, which means they can keep going on with their current business model.
The Startup Growth Cycle
The typical growth cycle of a startup consists of the following stages: idea generation, idea validation through research and development, product launch, and bringing down costs through innovation or outsourcing. Let’s take a look at it in detail.
1. Idea Generation
The startup idea generation stage typically happens when a founder or members of the founding team are sitting around one day and think, “Hey, we need to start a company. We have some great ideas!”
This could be an idea for a new product, service or business model. In most cases it’s one person that comes up with an idea and shares it with others in the founding team. Most founders will come up with multiple ideas at this stage and all these ideas will be given equal attention.
2. Idea Validation Through Research & Development
This phase involves research and development on the idea, which will be done by founders, members of the founding team or both. In most cases this research is handled by a team of members that are brought in on to help develop the product.
Research is a process that involves asking questions and finding answers to them.
The purpose is to figure out what’s possible and impossible with the idea, and when the possible is proved out – move it forward into the next step in the process.
3. Product Launch
This is the stage where the product or service comes to life in the form of a prototype. It’s important that this is built properly at this point, because it will become a part of future products as they are launched.
This is also a great time to hire new members of the founding team or bring other key members on board.
This phase can last anywhere from 6 months to a year, depending on how quickly prototypes are developed and how effectively they are tested out by potential customers.
4. Bringing Down Costs Through Innovation or Outsourcing
Once the product is tested out with potential customers and the market validation has been done, owners will again look at ways to reduce costs.
This is especially important in the early stages of a startup because it’s crucial to bring down costs as much as possible.
Outsourcing – bringing functions that are typically done in-house to a third party – can lower costs dramatically in this case and still save time for founders.
This can be done through working with a marketing team, web developers, legal teams or financial advisors to name a few functions.
