Thanks to the Internet, we have changed the way we communicate, inform and organize our daily lives, but it has also transformed the way we start a business. Thanks to new technologies, anyone without a huge capital can implement your idea and meet a need through the startups. Even some large companies, such as Amazon or Facebook, started out as startups. So… What’s a Startup?
A startup is a new or early stage company that has great growth potential and markets products and services through the use of information and communication technologies.
It is relevant to know how to distinguish between conventional SMEs and startups. Conventional SMEs come to market after investing a certain amount of money and must wait a while to start enjoying benefits. Startups, on the other hand, quickly go to market to achieve the necessary growth and financing through the digital transformation.
In short, startups are characterized by being:
- Young: companies familiar with a young, modern and technological environment, which after being born, try to get financing. With the aim of evolving into a small or large company or directly sell the idea to an already established company.
- Scalable: the main attribute of a startup is the speed and capacity with which it can grow and generate income quickly. Also, they are able to increase their production and sales without increasing their expenses. Therefore, their production and profit margin grows exponentially. Thus, despite their small size, they are able to generate very high revenues.
- Technological: these are businesses that are based on innovative ideas to satisfy a new need in the market. These entrepreneurs rely on digital technologies to evolve. Moreover, thanks to the interconnected digital world, they have the possibility of finding the essential funding to be able to develop their idea.
- Small costs: the starting point for startups is to keep production costs low in order to grow faster. For example, in their beginnings they usually develop their business in coworking spaces, without the need to have an official company headquarters.
What is necessary to start a startup?
Now we will explain the requirements that any startup must meet:
- Think of solutions to everyday problems: the philosophy of startups is to find practical solutions to everyday problems, whether it is shared accommodation, moving around a city or making a purchase easily and safely. Usually these needs are common to most of society, so the chances of the idea working are high.
- Search for creative and practical solutions: startups, besides being profitable businesses, are also based on simple and creative strategies, which no one has ever put into practice before. For this reason, their growth is rapid and their business model is attractive to customers.
- Think of solutions that are scalable: the service they offer has strong growth potential to achieve rapid profits and gains without the need to invest in infrastructure. For example, develop your business’ website or mobile application once and from there, many people will be able to buy your service or product without you having to invest more time or money.
- Using technology to offer the best service or product: any startup, regardless of the type of product or service it sells, relies on technological and innovation resources to achieve an online sales channel, better web positioning, digital marketing, as well as improving the production process.
- Establish what the objectives and deadlines are for each one: a startup must have very well defined short, medium and long term objectives. This is of great help to maintain order and direction in the project.
- Plan the business economically: define how much budget you need to start the startup and how much money each partner will contribute.
- Look for crowdfunding: if you do not have enough budget to develop your business idea, you can look for financing through crowdfunding. To do this, you must publish your idea on a crowdfunding platform in order to find people who will support your initiative and provide the money needed to get it off the ground.
- Form a team: make sure you have a team ready to create your startup. You do not need a large group, ideally each member should contribute something significant to the project.