What is a Startup? Everything you need to know

Find out what a startup is, what makes it different from a company, some examples of successful startups, and how to start your own.

One word has gained a lot of prominence in recent years regarding innovative businesses: startup. But do you know what this business model means? What is a startup, and how to start one?

The Internet came to revolutionize everything: the way we communicate, organize our daily lives, and consume. Including the way we do business!

Previously, ​​starting and having a business or company seemed possible only for those with significant capital.

But, the invention of new technologies and business models has allowed anyone to make their dreams come true through startups.

Some large companies, such as Amazon or Facebook, began as startups and have become excellent benchmarks for entrepreneurship worldwide.

What is a Startup?

The start-up 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.

The idea of ​​startups spread worldwide, gaining more strength from the 1980s.

Before talking in-depth about the characteristics of startups, we will point out the difference between this model and a traditional company (SME).

Differences Between Company and Startup

Exponential growth: a startup is a scalable business and grows 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: this 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 businesses 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 may 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.

know the Characteristics of a Startup a Little Better

Youths

Yes, many people consider 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:

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 increasing its expenses. Naturally, therefore, your contribution or profit margin grows significantly.

This 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 as 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.

Also Read: Technological Development

Economic

Compared to their profits, startups have relatively small costs, 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 delivered. Startups try to get out of what the market already offers to stand out even more.

Innovative

Innovation is the keyword of any startup. These companies seek to offer creative solutions for demands that have always existed but that the market did not take advantage of.

Three 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 switch on the computer or grab the mobile phone, and the primary 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 Lorentson 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

​​Starting and having a business or company seems possible only for those with essential ideas and startups. ; if you have any comments to contribute, we will be happy to hear them. Please share this article or tell us on social networks. We regularly update tips on our website, “work publishing.” Please keep supporting us. Thank you.