What is a Startup? Exploring the Essentials of Launching a Successful Venture

What is a startup? What is the difference between a startup and a normal business? In this article we will answer all these and many other questions. We recommend that you read carefully enough to get rid of this thousand-color word once and for all.

What is not a startup!

Before defining the word “startup”, it is better to address the misconceptions of this word.

A start-up company is not necessarily a startup. Every year, hundreds of companies are established only a few of them are startups. Many of these companies operate in the field of tourism, restaurants, travel tours, industrial equipment, household appliances, etc., and many of them are services.

No hair salon has been launched with the aim of attracting thousands of customers per day, but a search engine like Google has had no goal other than rapid growth and millions from the beginning.

All startups are not technology-oriented, and it is not necessary to register a company to launch them.

Definition of startup

By searching the word “startup” on the Internet, you will find many definitions, if we ignore the mistakes, the rest of the definitions will be slightly different.

The point is that behind these apparent differences, a common concept is hidden that can be found with a little precision. In fact, everyone looked at the issue from their own point of view, but the result of all of them is the same.

Let’s examine a few of startup definitions

Let’s start with Paul Graham; A venture capitalist from England who has provided a very interesting definition of a startup.

He believes that any business that is trying to grow at a high speed is a startup.

In Graham’s view, the most important difference between startups and traditional businesses is only one thing: “growth”.

And the interesting point here is that the basis of growth is largely dependent on the intention of the founder.

Let’s give an example to better understand the issue:

Our dominant idea of a coffee shop is a traditional business with a very simple business model.

The side is surrounded by four walls from morning to night and works to earn money. But if the same person is looking to set up more branches in other parts of the city or expand his activities to other cities, his business is no longer simple and traditional.

He now owns a startup. Because he is not satisfied with less and has growth thinking in his head.

He spares no effort to achieve such a goal.

For example, he creates an application to increase the number of customers.

It gives discounts for different occasions. He advertises his coffee shop on road billboards. He spends a part of his monthly income to improve the scope of activities and hire more employees and…

In fact, this person spends a significant part of his current income on future development, and this is exactly what lies in the essence of a startup.

(Dave McClure) introduces a startup as a company that is confused in three areas:

• Don’t know what the product is?
• Who is the customer?
• How to make money?

According to Eric Ries, an American entrepreneur What is a Startup?

a startup is an organization that must offer a product or service under uncertain conditions.

As you can see, in this definition, like McClure’s definition, nothing about the size of the company, business model or even the target market has been mentioned.

This means that nothing is known at the start of the startup.

Everything is based on speculation. The main goal is to make something that people are willing to pay for. Most people’s idea of a startup is a cool and technological product with an attractive and revolutionary idea.

They think that the path to progress is straightforward; Unaware that the reality is something else. Startups have to go through many twists and turns depending on the type of market, target and many other things in order to be on the right path.

Therefore, it cannot be said definitively when a start-up will turn into a commercial company.

The difference between startups and small businesses

The CEO of Invento Robotics gave an interesting answer to this question on Quora, which is very readable:

Tom and Tara are two neighbors in a tropical country. They decide to make a shade for their yard. Tom went to the market, bought a big and expensive umbrella and installed it in his yard.

Instead of an umbrella, Tara bought a sapling from a greenhouse and planted it in her yard.

People thought Tara was crazy, and at first glance, she seemed like that. After some time, that seedling dried up. Tara did not give up and tested different types of seedlings until finally she got one of them. During the growth period, the tree had no shade and fruit, and all the money and time was spent on watering, fertilizing and spraying it.

But after a few years, the seedling turned into a big and stout tree. The shade of the tree was enough not only for Tara but also for the neighbors. In addition to the shade, the fruit tree had another advantage. On the other hand, the umbrella that Tom bought at a high cost was still the same without any improvement.

Small businesses

Small businesses are self-sustaining organizations that are set up from the beginning with the goal of making money.

Although these businesses can be started with little capital and do not have much risk, we should not expect much progress from them.

In fact, there is no news of rapid growth; At best, they move forward slowly and steadily like a turtle. On the other hand, a startup is like a seedling. It may not be beneficial at first except for the consumption of resources, and even some of the seedlings will dry up after a few days, but if you are lucky and the seedlings survive, it can be of great benefit to you in the future.

For example

in addition to the primary purpose of shade, a tree also has fruit and beauty that adorns your yard. Many people do not approach them with the idea that most startups and investment companies fail or are not profitable for them at first.

But a question? Have you ever seen agriculture that did not plant seeds in the ground just because it does not immediately turn into a crop?!

The farmer plants the seed in the hope of reaping the harvest later. This is exactly what startup owners and venture capitalists do. Tara failed in her first attempt. He had to plant several trees until finally one of them reached the stage of growth.

In the same way, startups should not back down after the first failure. Effort is a part of the path and must be followed whether you like it or not. Tara went through a difficult path; He had to reach his new tree in the sun for days while Tom packed his bags under the shade of an umbrella.

Many people pass on scalable startups for the short-term benefits of traditional businesses. Walking this path can only be done by crazy and psychotic people like Tara!

Some people have a two-sided approach. They buy umbrellas and plant trees. to use the shade of the umbrella during the period when the tree grows. Some people start a side business in addition to the main startup to earn money through it.

This method sometimes works and sometimes it has the opposite result.

Living in the shade of an umbrella may reduce your motivation to grow a tree.

The shade of the umbrella may block the sunlight from reaching the tree and stop its growth. Apart from these, the quick income of the side business may prevent you from paying for the main startup.

Tara may have gone to plant saplings with a purpose other than shade. Maybe the shade was just an excuse to enjoy watching the tree grow. We mean that in startups, the motivation is not only money.

Sometimes watering and growing a tree is enjoyable. A startup is like a newborn baby who has nothing but expenses in the first years! But can this issue be a justification for not having children?

Further Details

According to the studies, more than 90% of them fail!

A startup is not like a small business or a regular company that you sit in a corner and hope to win.

You have to keep growing and nurturing the original idea.

Successful companies have followed this exact rule. They have left the sameness and false hope and moved forward with a spirit full of energy.

In startup discussions, the growth index shows you the right direction like a compass. To grow fast, you need to produce a product that can be offered on a large scale in the market

Rapid growth requires building something that is firstly in demand and secondly scalable. The barber shop has the first one, because people all need a haircut, but not the second one; Because no one is willing to travel 800 kilometers to another city to get their hair done. In addition, the capacity of this work is limited and few people think of increasing the number of hair salon branches. Therefore, such a business has a scaling problem and is not a suitable option for starting a startup. Building a software or educational site can solve the second issue, i.e. scalability, but it may face a small market.

startup vs a company

A startup and a company differ in several key aspects:

Age and Stage:

Startup: A startup is a newly founded business in the early stages of development, often characterized by its innovative ideas and growth potential.

Company: A company, on the other hand, is a more mature and established business that has passed the initial startup phase and is operating with a stable business model.

Innovation and Growth:

Startup: Startups prioritize innovation and rapid growth. They seek to disrupt markets, introduce new products or services, and scale quickly.

Company: Companies may continue to innovate, but they often focus more on sustaining their existing operations and optimizing processes.

Risk Tolerance:

Startup: Startups are generally more willing to take risks, as they are still exploring their market and business model. Failure is a common part of the startup journey.

Company: Established companies tend to be more risk-averse and place a higher emphasis on stability and profitability.

Funding:

Startup: Startups often rely on external funding sources, such as angel investors, venture capitalists, or crowdfunding, to support their growth.

Company: Established companies may have multiple sources of revenue and may not rely as heavily on external funding.

Size and Structure:

Startup: Startups are typically smaller in terms of team size and organizational structure. They are agile and can pivot quickly to adapt to changing circumstances.

Company: Companies are generally larger and have more complex organizational structures, including various departments and hierarchies.

Goals and Longevity:

Startup: The primary goal of a startup is often rapid growth, market disruption, and achieving a scalable business model. Startups may eventually become established companies.

Company: Established companies have a longer-term focus on maintaining market share, profitability, and sustainability. They have a track record of success and may have been in business for many years.

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