When you hear the word startup you would probably think about technology, silicon valley, and venture capital. However, many people misuse the term and have the wrong idea about what startups really are. Today we will burst all the myths surrounding startups so that by the end of this article you will be an expert on these kinds of enterprises. Read on for everything you need to know about startups.
Proper Definition Of A Startup
A startup can be loosely defined as a technology company with less than 100 employees. However, this definition misses out a lot of information about what a startup company really is. Steve Blank, a famous guru on startups, defines it as a temporary company that wants to create a world-changing business model that must be scalable and repeatable.
A startup is different from a small business. This is because startups are propelled by passion and big ideas towards becoming global companies that change the lives of billions of people. Small companies, on the other hand, don’t have the intention or drive to achieve global impact.
Examples Of Startup Companies
There are many different types of startup companies that you may start. For example, one may create a lifestyle startup. This is usually a single person company that allows the owner to work from anywhere in the world while living a freedom lifestyle. Such businesses are usually created by techies that have a highly marketable skill, for example, coders and developers. If you are in Orlando and looking to start a similar startup you could find a great co-working location whereby you can have an office at an affordable price.
Another example of a startup company is one whereby the founder intends to change the world with a revolutionary idea. Such companies include Google, WhatsApp, and Facebook. They tend to hire the most talented employees in order to come up with innovative ideas.
When Does A Startup Stop Being A Startup?
A startup stops being a startup when it finds the perfect product or service for its target market and then starts to scale. Additionally, once a company is stable enough to start buying other companies it loses its startup badge. An example is Google when it bought out YouTube or Facebook when it bought Instagram and WhatsApp.
Companies that have matured and can no longer afford to take high risks can also not be categorized as startups. For example, Mark Zuckerberg no longer has to risk investing his personal funds into Facebook to keep it running. The company is already self-sustaining. Additionally, if your company no longer brags about who your clients are, but instead major companies want to partner with you, then you are not a startup but an established company.
Other signs that you are no longer a startup could be if you have more than 100 employees. Additionally, if you pay your employees better than the industry average. Finally, if you make a revenue of more than $50 million and your company is worth more than $500 million then you are definitely not a startup.
How To Establish Your Own Startup
To create your own startup company you must first have a revolutionary idea. Startups usually change people’s lives and the founders have a lot of passion to pursue the materialization of their idea. You would then need to write a business plan and pitch it to get capital to start your company. Once you get your funding you would then set about actioning your business plan . This means working yourself and your employees hard to achieve the company vision.