A startup is a term in English used to define companies that are still young or newly created and have excellent growth potential. The origin of startups dates back to the mid-twentieth century (1950), in the United States, more precisely in California, in the area known as Silicon Valley.
Likely, you have already heard of this place, but if you do not know, it is an essential technological center where many of the big global companies are located, such as Google and LinkedIn.
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Differences Between Company and Startup
Exponential Growth
a startup is characterized by being a scalable business and growing much faster and more efficiently than traditional small or medium-sized companies.
Objective
Although any company intends to deliver a product or service, startups are born to solve a significant problem or pain in society effectively and creatively.
Business Model
It is a fundamental difference because while a traditional company uses business models that are already known and have proven to work, startups seek to create new ones, which causes many to fail and not make it through the first years of life.
Processes
startups work with greater agility in decision-making and the execution of operations.
Scope of Development
Startups generally belong to the area of technology or at least use it to deliver their solutions.
Financing
Small and medium-sized business enter the market after investing a certain amount of money and often have to wait a while to start making a profit. For their part, startups do the opposite; they enter the market to seek capital and use digital technologies to grow and find financing.
A startup will likely become an SME when it is more established. This transition is defined, among other factors, by the lifetime, the stability in the processes, the profit obtained, and the company’s long-term sustainability.
Characteristics of a Startup
Youths
Yes, many people consider all small and medium-sized businesses to be startups, but things don’t exactly work like that.
Startups are characterized by being young companies that have two options:
- Evolve and become successful companies.
- Close the doors.
Scalable
Scalability is one of the main attributes of startups. Its ability to grow and generate income much faster than its cost structure.
In other words, a scalable business can increase its production and sales without having to increase its expenses. Naturally, therefore, your contribution or profit margin grows significantly.
It means that startups do not necessarily have low profits because they are small. On the contrary, these companies are capable of generating very high profits.
Technological
As we have said, a startup is a new company with a strong relationship with technology.
In general, they are characterized by being businesses with very innovative ideas and a great disposition to satisfy the market’s needs.
New entrepreneurs and startup creators depend on technologies to grow and even find financing through Internet platforms.
The Startup Ecosystem Report, carried out by the Telefónica company, shows that 80% of startups have an engineer among their founders.
Economic
Startups have relatively small costs compared to their profits, which tend to grow significantly.
For example, companies like Amazon, Apple, Google, or Microsoft started in the homes or, better said, in their founders’ garages.
Its central premise is to keep costs low to obtain benefits much faster.
Disruptive
Look, all the most successful startups in the market broke the patterns of traditional companies in their segment.
Whether in the way of serving the public, pricing or even how the service is deliver, startups try to get out of what the market already offers to stand out even more.
3 Great Companies that Started as Startups
Now that you know what a startup is, we will show you some examples of great companies that started as startups and that, today, have become a trustworthy source of inspiration for many entrepreneurs.
Uber
This transport network, which connects passengers with drivers through a mobile application, began in 2008 with the idea that users could request a car with just one click on their smartphones.
Since then, Uber has become popular on all continents and today has 15,000 employees worldwide and a value of 50 billion dollars. In addition, it has expanded its business model with proposals such as Uber Eats. An application for ordering and delivering food between users and establishments.
Airbnb
This company started as a startup that catered to the demands of a market that needed to connect homeowners and travelers. Currently, Airbnb is present in 192 countries and 35 thousand cities worldwide. In addition to having a privileged position in the ranking of the most successful startups of the moment.
Spotify
Are you one of those people who turn on the computer or grab the mobile phone, and the first thing you do is open Spotify to listen to music? So, we bring you good news! Spotify started as a startup of two friends passionate about technology.
In 2008, Daniel Ek and Martin Lorentzon launched the first version of Spotify to allow. People to listen to music how and where they wanted. Access at first was by invitation only.
Currently, Spotify has a catalog of more than 35 million songs and has reached 365 million active users.
Conclusion
Making your startup successful is quite a tough job with the ever-increasing competition in almost every field. India is witnessing a new generation of startups and is making a remarkable presence not only in the domestic country but also across the globe.
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