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Years ago, for many, starting innovative business models was mission impossible, but in recent years, with the advances in technology, it is possible to fulfill that dream and startups are the best examples.
Today it is possible to start a business without a large amount of capital and at the same time obtain great growth possibilities. Having access to the Internet and a clear north are the main requirements for a new type of business to be successful. For example, big companies like Amazon or Facebook started as startups, and now they are known as Big Tech and are the great references of entrepreneurship in the world.
Let’s get to work! Learn everything you need to know about how to create a successful startup and not die trying.
What is a startup?
A startup is a small, recently created company with highly innovative and technological potential.
Simply put, a startup is an emerging company that develops innovative ideas linking its growth to the digital and technological world.
A startup does not have to be a technology-related business, but it does need the digital world to be successful.
How does a startup emerge?
By not needing large investments, a startup goes to market with capital needs and with the use of digital technologies manages to find funding. The key: try to fill gaps in the markets with a proposal that makes a difference and attracts large investors.
If you have ever seen the TV show Shark Tank, you will understand how a startup emerges. It starts with an idea with a low budget and investors, better known as “accelerators,” who have sums of money to support and boost the business.
These small and new companies usually have low implementation costs, which increases the risk of loss, but if they achieve their goal, it also increases the possibility of a large profit in a very short period of time.
What are the main characteristics of a startup?
The difference between startups and traditional companies is that these emerging companies usually do not provide a service. On the contrary, focus on creating products for themselves or selling them to large companies and thus generating a new user experience.
According to Economipedia, there are four elements that distinguish a startup from a traditional business: it is temporary, novel, low-cost and relies on external funding from private investors or business angels.
The intensive use of technology allows them to generate economies of scale that translate into substantial revenues, so their main tool to make themselves known in the market is the Internet, investing economic resources in hiring online marketing strategists.
Other important characteristics are:
A large amount of capital is not necessary for its start-up.
The use of new technologies and digital marketing is their main strategy.
They bet on innovation and efficient problem-solving.
For their growth, they rely on scalable business models through private investors.
How do startups emerge financially?
Although one of the main characteristics of startups is that they do not need a previous large amount of capital, their financing will always be important in order to become a scalable and successful business model in the long term.
Previously, we mentioned the Shark Tank program as an example of how startups emerge, however, the case of the television program is only one of the various ways in which a startup can emerge and grow.
Financing can be provided to start a startup or to boost its activities once it is up and running, and its main types are as follows:
Business angels or angel investors
BBVA defines them as people who decide to invest their money in the initial phase of emerging companies in exchange for an equity stake. In many cases, they act as mentors and offer advice to entrepreneurs to help them on the road to success.
This is the financing obtained prior to the incorporation of the business. It is considered risk capital because of the uncertainty generated by not knowing the economic viability of the company.
It is known as venture capital and is a financial activity in which one or several investors create a fund to search for, select and capitalize on an emerging project.
It is used by private economic agents to develop their economic activities and thus obtain an economic benefit. Its origin comes from the resources of families and private companies without public participation and is intended to generate value.
Importance of startups today
A startup goes beyond the conventional, and that is why today they gain importance in the development not only of economies, but also of innovations that at the same time help to solve complex problems that are emerging in society.
One of the most important concepts for modern society is that of lean startup, which refers to the method by which a company decides to create and market a product with limited features to see how it turns. It also analyzes the data it provides in order to improve its capabilities.
By its nature, a startup seeks to fill gaps in niches that have been little explored, which is why they currently lead innovation by generating disruptive changes in the business ecosystem.
This is not a small business selling clothes or food. It is a small company that presents projects that can change the course of history and trigger progress.
Thus began well-known delivery companies such as Glovo, which came to collect and send orders in less than an hour through delivery drivers called “glovers”. Today it is one of the most downloaded delivery applications, with more than 30 million installations, also generating millions of jobs around the world.
Over the years, collaboration between startups and companies has become increasingly common, as they have become important sources of innovation. Such is the case of the brewery AB InBev, owner of well-known brands such as Budweiser, Corona, and Pilsen. The company launched an accelerator program called 100+ Accelerator to promote different startups around the world.
In Latin America, for example, startups dedicated to creating sustainability solutions have already benefited and offered their services to the brewery, which decided to transform its business to the service of technology, while accelerating dozens of entrepreneurs.
5 fundamental keys to starting a startup
Developing a successful startup involves a series of steps to go from being a creative and innovative business idea, to an idea with guidelines and objectives to meet in a market as complex as today’s world.
Here are 5 fundamental steps to starting a startup:
Find a need for your idea or innovation
This should be done after market analysis, delving into what people demand and what sectors can potentially benefit your idea.
Define the market
Startups take advantage of specific markets where innovative ideas can be more profitable, accepted, and get more profit from their diffusion.
Define initial goals and available resources
It is important to consider what you want to achieve with the development of innovative products, what you want to achieve, and how much capital you have
Opt for the lean startup model
This model allows you to know the possible strengths of your product, redefine some of its elements and analyze its impact on the test market.
Readjust and attract capital
After testing its actual performance, you can try again to position yourself commercially and along with this process start a strategy to attract potential customers and investors to boost your new business.
If you have a good and innovative business idea, but lack the capital to develop it, creating a startup is your best option. This is especially true because now, with access to the Internet and new technologies, you can be a protagonist of progress and development of free trade in the world.
Don’t forget to visit the articles we have prepared for you and learn more about these business entrepreneurship models to help you on your way to financial freedom, and remember that towards success… we don’t ask for permission!
Sabrina Martín Rondon is a Venezuelan journalist. Her source is politics and economics. She is a specialist in corporate communications and is committed to the task of dismantling the supposed benefits of socialism // Sabrina Martín Rondon es periodista venezolana. Su fuente es la política y economía. Es especialista en comunicaciones corporativas y se ha comprometido con la tarea de desmontar las supuestas bondades del socialismo