What is a startup and its various settings?
What is a startup? - The Emergence
PTo explain this phenomenon we need to go a few years back in time to understand what were the variables that influenced the environment and provided the emergence of startups.
Even before accessing the quality of the Internet, one of the factors that were fundamental to understanding what a startup was was increasing the accessibility of personal computers. To whom can we credit this change? Of course, to the best known entrepreneurs in the world Steven Paul Jobs e William Henry Gates. In the insane race for market insertion, the two technological entrepreneurs over time provided that anyone with a minimal condition could acquire a personal computer and have access not only to the digital world but also to create their own ventures in the great network that was emerging. Obviously we are talking about how these changes occurred in the US, because here in Brazil this access to personal computers went a bit further, as did the startup boom.
Well, now that people have access to their own computers to work on, what is the next historical fact that helps us explain what a startup is?
Broadband has its key role in the process of understanding what a startup is! With her small work teams were able to unite and perform activities in a remote way. In addition, the amount of access to information has grown exponentially and enabled people with technical backgrounds to migrate from the area and perform different tasks.
This perfect scenario was warmed by the US Internet bubble between the 1996 and 2001 years. Period where known companies such as Paypal, they achieved thunderous growth in a short time and with tiny teams compared to the traditional large companies in the market.
So we can now have a more assertive definition of what a startup is!
What is a startup? - Most known definition
For most people who have had some prior knowledge on the subject, the definition of a startup boils down to two main characteristics: very low fixed and variable costs and high growth capacity.
In this definition, startup would be any venture that has a very lean staff, very low costs (can be explained by the constant use of computers and the internet) and a possibility of absurdly large short / medium term growth for the size of the company. This growth of startups can be explained in good ideas with products or services that can gain worldwide through the use of the Internet. So a startup located right here in Brazil, if she wanted to sell there to China would be possible. We have as an example the Rockett, a startup incubated in the INOVA-UFMG which could sell to any part of the globe, since its service is building websites in an intuitive way and without any need for technical knowledge.
But this definition of a startup is very comprehensive. A small company with a traditional product and a lean team could fit that definition. As a family restaurant of Japanese food you are about to open your venture in a city or state that has no such restaurant. It has low costs, latent demand and possibility of much greater growth than other businesses.
In the other two cases we may notice a more singular definition of what a startup is.
What is a startup? - Definition of Incubators and Accelerators
For many of the institutions that foster the startup environment, such as incubators and accelerators, the latest definition of what a startup is still not enough to separate the different types of businesses.
In this case, it is not enough to have low costs and good growth forecasts. For you to be a startup has to be a company that also has technology base in your business DNA. This technological base can be in several areas. It can be a startup of Information Technology, which covers software development. It may be a spinoff enterprise of academic research, such as Wetlands. Or even some hardware development in areas such as mechanical engineering and others.
The important thing is that the company called startup needs to have any kind of contact with any technology. In this way, our beloved Japanese restaurant is not classified as startup anymore.
What is a startup? - Definition of Investors
Finally, the most radical definition of what a startup is is more used among people with daily contact with business. Investors have one feature in common among them: achieving the highest financial results with the lowest possible investments.
It's a very radical definition but it really makes sense when analyzed in conjunction with leading startups known around the world. It is not enough to have low costs, growth potential and technology base. For you to be a startup something beyond must be achieved!
A company is only defined as a startup if it has the ability to abruptly modify the market it is entering. But how would that be? A startup's business model would be so innovative that it would change how people consume, locate, communicate, and so on. It would totally change the rules of the game stipulated in a certain market. And consequently, it would create hundreds of new opportunities and declare the failure of dozens of other ventures.
For better development of Startup it is recommended to perform a Business model to avoid failures and losses.