What is a startup in simple words? Startup - what is it: the best ideas

The term “startup” periodically comes across us in the information space. The word has practically become colloquial and to make it easier to handle, it makes sense to close some questions. The article will be useful to both beginning entrepreneurs and investors. Those who generate ideas and those who are looking for ways to implement them.

A little bit of startup history

The concept is believed to have originated in 1939, when high-tech and innovation companies were based in the San Francisco area of Silicon Valley.

William Hewlett and David Packard led a group of students from Stanford University. They organized new business, applying in principle new idea. They called their company a startup (start-up - from English: start, start, start something). Today, this startup project is known as the global Hewlett-Packard Corporation or HP.

Financiers, entrepreneurs and analysts spent a long time deciding what lies at the heart of startup. Either the company's rapid growth, or high risks when creating a product or service, or short-lived, but active work. Finally, the classic definition of the term was introduced by American entrepreneur Stephen Blank: “A startup is a temporary structure designed to find and implement a scaled business model.”

In other words, this is financial project designed to make a profit in the shortest possible time. The main characteristic of a startup is often called the use of innovative technologies. Sometimes it is mistakenly claimed that it is a project created on the Internet. In fact, it is not at all necessary that the project must work in the IT field, it can be in any area of life: medicine, transport, trade, services, etc.

The difference between a business and a startup

Today it is fashionable to call any undertaking in the field of small business a “startup,” but this would be incorrect. Opening a coffee shop, a car wash, or launching a new social network will not fall under this definition unless there is a unique idea at the core.

A businessman tries himself in ready-made segments, having start-up capital. A startup’s business project is always a big risk with uncertain prospects for financial investments.

Here are a few positions to indicate the boundaries of the concept:

This is a “freshly minted” company, often not yet registered as a legal entity. Often startup founders are students. These are young, ambitious people 20-26 years old. Sometimes even schoolchildren. Another name for a startup is “garage business.” Young people, lacking funds, often started businesses in their own garages.
At the root of a startup is an innovative idea. Something that will improve life and solve people's problems. A new product or service does not necessarily have to be in the IT field.
A team of like-minded people is working on the implementation of the project. The idea may belong to one person, but its implementation will require support. Even in case of failure, a purposeful, well-coordinated team of startupers will be able to start new project from scratch.
A startup should start selling a product or service as soon as possible. In the West, if a startup does not start working and does not bring big profits in 6-8 months, it is liquidated. Our promotion period can be 2-3 years, but this is more likely a business.
An important component when developing a startup project is finding sources of financing. Moreover, as we progress, more and more infusions will be required. The project will not survive long on “bare” enthusiasm, because the main idea is to make money.

Stages of startup development

Pre-seed. A clear definition of what the consumer needs within target audience. At this stage, as a rule, the project implementation plan has not yet been formed.

Seed Preparing for launch. Compilation step by step plan actions. Market research. It's time to think about finding investors.

Prototyping. Creating a working startup model. The prototype supports basic functions and is designed to operate under ideal conditions.

Alfa version. Testing a product on a small group of consumers to identify pros and cons. At this stage, adjustments are made and defects are eliminated.

Closed beta version. Since the product is already viable, the target audience for testing is expanding. Interested investors and commercial partners must already be found.

Open beta version. Maximum promotion of the project. Conclusion of contracts. Selling services, products.

Goals and types of startups

Based on the main characteristics, we highlight the following concepts:

A person’s passion—a hobby—often turns into a project. What “warms” the soul can become a profitable business. The majority of such offers are available on the startup exchange.
The most thoughtful and calculated projects are those created for the purpose of making money. Getting rich is a powerful motivator.
In the family contract format, hand-made production, hotel or restaurant business are especially popular.

Projects in the “Global Company” category can be considered successful only after reaching the global level. They are unique, they use modern technologies, are long-lasting and attract clientele from all over the world.

The term “Startup” is quite common in the information space. Many people understand almost all new projects by it entrepreneurial activity. At the same time, it is worth distinguishing a conventional business model developed on the basis of already applied principles of production or service provision from what can really be called that word. Startup in simple words, first of all, is some kind of innovative project that can bring quick income. Notably, such innovations are not limited to industry and application. Accordingly, this could be medicine, transport, technology, services, trade, etc.

Difference from regular business

Despite the existing definition of startups, this word continues to be widely used and applied to many projects. This is due to the fact that the existing criteria and characteristic features are somewhat blurred. They do not contain clear boundaries that can be expressed in numbers. However, there are still certain indicators that are worth paying attention to:

Firstly, unique of its kind and New Product . Moreover, the owner of the idea offers certain things, not necessarily without a so-called base or platform. This could be the improvement of old services and products. It is important that there are no analogues. In most cases, such ideas arise in the process of using objects. For example, if to a certain household appliances add specific details, it will begin to perform functions that are not inherent to it. It is noteworthy that it should be in demand. Otherwise, it will remain just an innovative solution that is of no use to anyone.
Secondly, having a business idea as the basis. That is, a person must imagine how to organize the implementation of an idea into life, what this will require - production, equipment, premises, software.
Third, age of startup founders. Average age The startup age ranges from 25 to 27 years. Although this does not mean that people of retirement age cannot bring ideas to life. The majority of technology-based projects belong to businessmen over 30 years of age.
Fourthly, willingness to work and develop during the start-up period without profit in the first stages. According to statistics, startupers invest fully in the idea, if we consider it in terms of the finances they have. Additionally, investor funds can also be raised;
Fifthly, short period of first profit. In the USA, for example, if after 6-8 months it is not there, then the project is closed. In Russia, such a period can last longer – up to 1-1.5 years. On the other hand, if the return on investment occurs after 2 years, then such projects are already classified as standard business models.

Stages of development and formation of a startup

Startups and the principles of their organization may differ slightly, but most of them develop along a certain path consisting of stages.

First stage

The first stage is the birth of a startup. A unique and innovative idea appears.

The essence of the idea is to improve life, change an existing product, and enhance a certain effect of a cosmetic product. Regardless of the industry or application, it is something new that has not been used or produced.

It is at this stage that a team is formed near the owner of the idea, ready to work on its design and implementation.

In most cases, even at this stage, financing, even minor, is necessary. As an option, at least for office equipment and obtaining advice from lawyers, accountants, and economists.

This stage is characterized by difficulties in finding investors. Even if there is ready-made business plan the organization or individual must believe in profitability and prospects. And it is not so easy to convince them without first results of work.

Second phase

The second stage is the formation of a startup. At this stage, there is already a created working model and a team working on it. A special feature of the team is clearly distributed powers and a strategy for promoting an innovative idea. The first steps towards advertising should already be taken.

In order for the activity to be carried out within the framework of the law, the aspiring entrepreneur must be registered as a business unit. This may be legal or individual. The choice of business form will be made based on the planned volumes of production of goods or services and other parameters. It is worth considering that any actions, including the purchase of materials, payment of rent, conclusion of contracts, must be carried out on behalf of legal entity or IP.

The main task at this stage is the formation and debugging of a system for promoting a new product or service. In addition, sources of financing must be opened up more actively.

One of the options for finding investors, which is beginning to be actively used in Russia, is crowdfunding. The essence of such a project is to publicize the idea and receive funds from everyone who wants to profit from it. To do this, it is necessary to use special platforms where aspiring businessmen and startupers post their proposals.

Third stage

The third stage is the so-called early development project. A characteristic feature is the presence of an already functioning company producing the product.

Accordingly, there is a moment of final formation of a service or product, taking into account the identified defects. Most often, at this stage, additional investors join in and no longer need to prove that the project is profitable. They can even offer financial investments themselves, seeing the demand for the product and its popularity.

Fourth stage

The fourth stage is expansion. During this period, the marketing system has been worked out almost to the smallest detail and the company is ready to expand production. New points may open, and broadcast advertising will increase.

At this stage, many idea owners decide to sell the business because they are interested in something new, but are no longer interested in running a business in the standard sense. On the other hand, skillful organization and development can bring large amounts of profit. That is, you should not rush to conclusions and make rash decisions.

It is impossible to say with certainty that such stages are absolutely typical for all startups. Everything can change depending on the purpose, product, location of the business. The need to establish a company and invest funds - personal or investors - remains unchanged.

TOP implemented ideas

Many unreasonably believe that startups in 2019 may be focused on IT technologies. In fact, new ideas are not necessarily supported by knowledge about technology or engineering. The top startup ideas that have already received recognition indicate that even an ordinary person can bring something new to life:

An idea created with ecology in mind. Hair shampoo is produced, which is bottled into containers brought by the buyer. Nephentes bottles do not look like the usual form for such a product. They are more like an enema, which is very attractive to buyers. This reduces the amount of discarded packaging that pollutes the environment;
Production of edible tableware. Moreover we're talking about not only about the plate or bowl, but also from natural material spoons are made. This startup found application in India, and for production they use ordinary flour. In the future, entrepreneurs plan to release a gluten-free version.
Special fingertips for junk food. The idea appeared in Italy and is to produce them based on latex and sell them both as an independent product and as a set with chips, crackers, and nuts.
Use of folding napkins. Initially, the material is pressed in the form of washers - small tablets. When placed in an antiseptic solution, the fabric unfolds. Thanks to the properties of the solution, the napkin also becomes an antiseptic, and also has a pleasant smell. The main advantage of the idea is that these napkins are reusable.
Opening of WeFood specialty supermarkets in Denmark. They sell products that cannot be found on the shelves of regular stores. Products are sold here with incorrect labeling, with appropriate deadlines, and torn packaging.

Startups based on IT technologies

Firstly, it is widely known to users of one of the social networks Prism app. It transforms ordinary photographs, turning them into something like artistic canvases. The application was created by Russian startupers. The peculiarity of the program is that it does not just apply a filter, but analyzes the frame and forms an image from scratch.
Secondly, card-based startup. The Cardberry project is the idea of creating a device that combines all the cards a user has. If it is necessary to use one of them, the user enters the application and selects it from the list of available ones.
Third, creation of a service for finding travel companions for car trips. Such a startup began its life in the USA and is now widely known within the Russian Federation.
Fourthly, creating an application for mobile phone , which allows you to work in the financial market.
Fifthly, service development, allowing you to create recipes for dishes and adjust fitness programs.

Finally

Despite the seeming complexity of introducing an idea into a business, such actions are quite within the power of an ordinary person. Most big problem The challenge startups face is finding an idea that really works. To do this, you will need to constantly receive information about developments, the implementation of ideas, and the development of technologies. It would be helpful to have experience and knowledge in a particular industry. Of course, people without education can also be startupers, but the most “long-lasting” projects are created by professionals.

Startup is a start-up company whose activities have just started. Like all newfangled words, startup comes from English and means starting.

Everything seems clear here. Created new company, it is still young and unknown to anyone, the services or products provided are still quite new. The number of employees of such a company can be from 1 or more. And in some cases, there may be no company at all. That is, it could be some kind of project done on the knee. Official registration of a company can be carried out after it becomes clear whether the business is profitable or not.

Why do you need a startup?

A startup, like any other business, must solve a specific customer problem. If there is no such problem, it will actually turn out that no one will use the product. Therefore, before starting to develop a product, you need to assess the need in the market and understand what problems the product solves.

Startup funds

Many startups start their work by own funds. If there are no own funds, then, as a rule, startups try to raise cash from other companies and investors. If they think that the startup’s activities are profitable, they can allocate funds for the development of the startup.

Investments for a startup

Attracting external finance from investors has several stages:

Seed investments- this is the very first stage at which funds for a startup are raised by the founders or their acquaintances. These funds are able to cover the initial costs of employees, necessary equipment and so on. Sometimes, if the founders do not have finances, then money for seeding is given by different venture funds.

Angel Investments- this is the stage at which the start-up is financed by investors - individuals and companies. They usually receive a stake in the business and the right to influence the startup's processes. Investor finance allows you to expand your staff, buy new equipment, expand production and, of course, speed up the acquisition of clients.

Round "A"- these are investments that are attracted from venture funds into a company with an already working product. Let's say you have created a product with your own funds that many customers are already using and making a profit. In order to increase profits and the number of clients many times over, funds are raised from various funds. This round is not final, but there may be similar ones, with their own characteristics, called letters of the alphabet.

In addition, various technological institutes, often foreign, are involved in the development and support of startups. Such institutes provide grants for startups, some of which are created by students and graduates of these very institutes.

Who are startupers

The startup has become a kind of culture in which every participant is able to contribute. These participants are now commonly called startupers. Just not to be confused with the old farts :)

Quick rise or instant fall

Perhaps the main feature of startups is its fast start, and in some cases, its quick end. Some products quickly take off and take root, others suddenly fall, sometimes without even having time to get off the ground. The bottom line is this.

New problem solving

A startup, like any business, solves a problem. This can be done in different ways. Some startups are able to solve problems, but they do it in a completely different way than existing companies, using new approaches and tools. On the one hand, a startup does the same thing as other companies, but does it much better and with benefits for the client.

Flexible state

At the beginning of its journey, a startup can actively change if the currently assigned course seems incorrect.

Finance for growth and decline

To take off quickly, many startups are looking for fast way get money from investors. In general, attracting investment will help a startup take off, but you need to understand that in this case the founders will have to share a piece of the pie. And you need to understand that investors are not Charitable organization. Their goal is to make money. Once your product fails to make a profit or becomes costly, investors will stop funding the product and may resell their shares.

Startup team

Alone in the field, as they say, is not a warrior. Therefore, many are in a hurry to assemble a team of specialists to work on the project, attracting shares in the project or agreeing on a certain amount.

Why do startups die?

Common causes of startup death are:

the product does not solve any problem and is simply not needed by anyone
ran out of money :)
different views of the founders on the vision of the project

Perhaps this is all that needs to be said about startups. I hope this information will help those who are starting their own business.

Before creating your own project, you should find out what the differences are between small businesses and startups. Startup, startup - what is it, how to start developing a project, find investors, achieve success. At the current time there is great amount small businesses that consider themselves to be startups. But not all of them can be classified into this category of projects with bright distinctive features, which set them apart from other companies.

What is a startup

The word is a transliteration of the English startup. A startup - what is it in the classical concept, how they look for investors, sources of financing, which will contribute to the rapid launch of the project. The main feature of startups that makes them potentially profitable business is the use interesting ideas, promising endeavors. In addition, assembling a good team to start is more important here than in the field of regular business.

Who is a startuper

At the initial stage to create successful business, a team of people who are considered startupers is being recruited. Only these people are responsible for the successful implementation of the plan, initial capital, and attracting audiences at presentations. Often, startupers become students who want to make money and achieve success, but who do not want to work in firms, large corporations, or become entrepreneurs. They create a business plan from scratch, attract supporters and private investors in order to develop a unique product, own business, capable of generating large incomes.

Startup and business - distinctive features

Businessmen realize themselves in ready-made industries and enterprises, and startupers launch their business projects in conditions of uncertainty, high risk, and minimal budget. Consider the key differences between a startup and a full-fledged business:

Scale. Entrepreneurs implement their ideas in already developed areas; they are limited by the clear boundaries of the industry. Startup has no such limitation. The very definition of a startup lies in innovative ideas that constantly move it forward. Examples successful projects: Google, Apple, Microsoft, Facebook network.
Rates of growth. The growth stage of a startup begins and lasts much longer than that of a typical business. Without exception, all aspects of startup are aimed at the successful implementation of a product or service in the target community in as soon as possible and most effective way.
Profit. At the stage of financing, determining the amount of investment, startupers are looking for investors to promote their idea. From initial capital It greatly depends on how advanced technologies the team can use during the development phase and after it. All this contributes to rapid advancement and has a direct impact on profits.
Technology startup. The success of a startup is built not only on ideas, but also on innovative technologies. Many projects use the latest developments.
Life cycle. A clear definition of the time frame for the existence of a startup is impossible due to the lack of boundaries for its development. It can fail at the very start or live for several decades, continuing to improve.

Startup projects - types and areas of activity

The division of startups into types and classes occurs not only according to their knowledge intensity and purpose of creation. Projects can also be divided according to less general criteria:

Hobby. There are the most such projects on the startup exchange. They were created by people who tried to turn their lifelong passion into a profitable, interesting business.
Creation for the purpose of enrichment. Starting a project just for the sake of money can be a good motivation at first. Such companies are better thought out and organized than the first ones.
Family project. This type of enterprise, common these days, mainly occupies the niche of restaurants, hotel business, production of hand-made products.
Global company. Startups can be called successful after reaching the global level. Projects in this category are unique, attract clients all over the globe, their life cycle will last for a very long time.

By degree of science intensity

The classification of projects by knowledge intensity is unambiguous and has only two varieties:

Standard company. It uses conventional technologies and does not require additional developments in its field of activity. Examples could be companies in the hotel, restaurant business, and hand-made products.
Company using innovative technologies. The second type is more complicated and develops with the use the latest developments in the relevant industry. It may require significant additional financing, searching for large investors for its implementation, promotion, and development.

By purpose of creation

The advantage of a startup is achieved by setting goals that are decisive in its start, development, and promotion:

Earnings. The basic, most common purpose of creating a project. Even if employees work “for the idea,” the project will not last long without profit.
Idea. There are people who are ready to work for the development of a certain industry, information technology, economy, industry. Such companies have the least chance of success, but if successful, they can bring huge profits.
Recruitment of a professional team. A good, well-coordinated team of motivated startupers is capable of a lot, but it is very difficult to assemble it. Even if it fails, such a company can always start another project from scratch.

How to create a startup

To be sure that the project idea will become popular, you need to consider the very concept of a startup - what it is, how to properly start the development of a company, what to focus on in order to understand what they are based on:

Thinking through an idea. Key Feature the project should not have analogues in the country or region that will be involved in promotion. You can come up with this idea yourself, buy or order it on the startup exchange, or borrow it from foreign analogues.
Search for a team. The people involved in the project do not necessarily need to know everything about the industry that the startup covers. This is encouraged, but all employees can develop regardless of knowledge.
Drawing up a business plan. The plan is the most main part any project, without which an accidental failure can become fatal to the entire idea. The development stage should be approached with all responsibility, which will contribute to product sales.
Searching for investors or start-up capital. Even the most promising ideas are worth big money at the implementation stage. Finding finance is not easy, but it is possible. Investments can be provided by banks, friends, relatives, and other people who are interested in the original idea.

Startup idea

The popularity of startups is explained by the innovativeness of the ideas on which they are based. The main idea should be unique, capture the client’s attention, and be economically beneficial to those who invest money in the idea. To achieve these conditions, you need to study in detail the question: a startup - what it is, how they are classified, what ideas have already been developed, what innovations they are based on. The following ideas are gaining popularity in the world at the moment:

Ecology. Waste disposal, work optimization treatment facilities, developing new ways of landscaping the territory - all this is only gaining popularity and has a good chance of becoming a platform for the development of a new project.
Internet projects. Ideas in the field of IT, platforms VKontakte, Facebook, the Internet in general, have huge potential for the base own company, engaged in website promotion, assistance in recording and storing the history of the Internet, the world, etc.

Drawing up a business plan

Startup - what is it, if not another form of small business, characterized by growth rates and greater requirements for the size of investment received? As is the case with a regular business, a startup needs a well-developed plan that will reflect all stages of development and formation of the project. When developing a business plan, you need to think about:

idea development;
search for a team;
analysis of the needs of the target audience, mistakes of predecessors;
search for investments;
analysis of possible risks;
implementation of the idea;
promotion, advertising, working with the audience.

Search for investors

All project participants, one way or another, want to make money. Potential investors invest money in development in order to get a share. To attract people willing to provide financial support, you need to know where to look. In the startup sphere, the 3 F rule applies: family, friends, fools. Which means: family, friends, fools. These are 3 sources of startup capital for startups. The second option is venture capital funds, banks that issue loans, or investors who make money by helping start-up companies. Attracting investors is possible on special exchanges.

Project development

The progression of any such project proceeds according to a standard plan, which will be the same for new technology environmental improvements or innovative ideas in the hotel business:

generation stage;
development stage;
startup stage;
growth stage;
expansion stage;
completion stage.

How to promote startup correctly

Promote a startup, startup - what is it, how to achieve maximum efficiency, attract a large audience, create positive opinion about business. To understand how to properly promote a company, consider the list of advertising platforms that have maximum efficiency:

Social media. Create accounts in all in social networks, tell people about your idea. This will give a small influx of interested customers.
Internet advertising platforms. Highly efficient and customizable targeted advertising, which will be shown only to those groups of people that you specify in the request.
Website creation. Your own web page will increase the chances of successfully attracting clients and supporters. The information offered there is not limited by the rules of any resource, but only by the imagination and needs of the startuper.
Posting advertisements. An archaic way that will allow not only Internet users, but also random passers-by to become involved in the idea of the company.

Successful examples of startups

There are many examples of projects that were able to develop, achieve success, and become financially profitable. This ending for them was the result of a well-chosen idea, competent team work, effective promotion, and selection of investors interested in developing the idea. To understand what a startup is and how to properly approach its development, consider examples of successful ideas that were positively received by the audience and still exist.

In the field of IT technologies

Information Technology occupy a significant part in the life of society. A properly organized startup in this industry can achieve a lot:

Microsoft. The development of the project began with orders for programming in the basic language. Now it is the largest corporation in the field high technology, software, which has developed thanks to extensive venture investment, support original ideas Bill Gates.
Google. The history of the largest search engine on the Internet began with the desire of Larry Page and Sergey Brin to create a single integrated universal digital data storage library. Further research on this topic led students to create a popular search method, recruit a team, and found a corporation.

Cooking and restaurant business

A type of culinary startup – what is it, what is it characterized by, what features does it have:

"Super pot." The essence of the popular service is the ability to prepare a dish at home, and then, by posting its photographs, recipe, description, sell the culinary masterpiece to the user who will be the first to reserve the delicacy.
Madwinebar. The idea of creating a bar where people can taste delicious wine belongs to sommelier Vladimir Yuryev and chef Dmitry Evstigneev. The bar offers free tastings and daily specials.

Hand-made products

If a person knows how to work with his hands, he will not be left without work. This is true for startup Porch as well. A large aggregator engaged in the centralized collection and sorting of orders for repairing something, doing housework, and creating things appeared in Seattle, Australia, in 2013. The user can place an order or post a resume himself, indicating his skills and abilities.

Internet startups

Type of network startup - what is it, what types of information projects exist:

"Writing in the Sand" The company achieved success thanks to Anton Velikanov. Inspired by the beauty of the Costa Rican coast, the young man came up with a way for everyone to receive a photo of a beautiful place with a custom signature right on the sand. The site was created in 4 days, and the starting capital was only $100.
"Social alarm clock" The idea belongs to Hrachik Adzhamyan, who tried to develop an application to help people wake up in the morning. His research showed that it is easier for a person to get up when an unfamiliar person acts as an alarm clock, rather than a program on the phone. Currently, the number of users exceeds 2 million, and a private investor who donated $500 thousand helped in the development of the company.

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