You would have heard about the company but did you know what the Startup Company is? People also add the word “Startup” to many new ventures. They believe that these companies are such that were young people start a new venture.
They are either Tech based companies or someone’s own a new innovative product. But the question arises whether this is the correct meaning of Startup Companies?
The CEO of a large company says that a Startup is such a company that believes in solving a problem whose solution is not clear. But, there is no guarantee to succeed. So if you want to know what actually a Startup company is?
Then read this post completely. By the end, you will get an idea that what is the correct Startup Company. Then let’s begin without delay.
What is a Startup Company?
A Startup company is an organization which is designed to achieve a large scalable and repeatable business model. These companies are often new and they are in the phase of development. Which requires strong market research.
These word “Startup” became so much more popular because when many dot-com companies were created during the dot-com bubble. People used to call these companies as Startup companies at the time. Which gradually became a trend of the names of new companies.
We can understand a Startup company like a small child, which is the time to move forward. These companies offer a product or service that was not before available in the market. Which makes it very profitable for other people.
What is the Startup culture?
Startup sometimes values casual attitude so that the efficiency of employees in their workplace can be enhanced. In 1960, by a study by Sir Douglas McGregor, it has been found that there is no need of stressed punishment and rewards in the workplace.
To get good results, it can happen without them too. Some people are motivated themselves only to do the incentives of the work to live.
When this stress was lifted from them, they found that the workers and researchers are focusing on their work, which is increasing the productivity. This gives them the potential to achieve even more for their company.
These cultures evolve and are adopting big companies so that they can capture the bright minds of Startups. Google has purchased many companies in the past few years which they thought could provide better returns.
With such cultures, employees are not stressed while working and they can give their good productivity to the company. They feel more comfortable by doing so they can do their work.
Who are Co-Founders?
Co-founders are called those who have been involved with him during the growth of Startup companies. Anyone can become a co-founder, whether it is a company or a person’s outside.
Mainly co-founders are Entrepreneurs, Engineers, Venture Capitalist and others who are already connected to these companies.
Therefore Co-Founders do not have any legal definition. Anyone can be called co-founder only when he has information about the board of directors, investors or shareholders…
And who is keeping his intention, in front of these people and other employees of companies, listen to this and execute. Since no definitive agreement of co-founders is not mine, so it is justified to have further disputes.
What is Internal Startup?
Large and well-established companies often try to make their own innovation on how they prepare Set Ups, which are called “internal Startups”. These companies are developed into a separate entity. And when they come into the market with their new product, they have to launch it under the same companies. It does not need big companies to acquire other companies. When they can make their own products themselves.
A Startup is always Temporary
The organizational function of any Startup is that they always seek a repeatable and scalable business model. A famous person has said that the Startup Founder has three main functions:
1. Provide a vision about the product and its features
2. Create a series of hypotheses in the case of all things in the Business Model: such as
- Who are the targeted customers?
- What are Distribution channels?
- How can we make money and finance the company? And so on.
3. Confirm whether the model is correct by seeing how the behaviour of the customers is.
How are Startups funded?
If we talk about Startup and small business, then the fund is funded by the founder’s savings, friends, family members or bank loans at the initial door. But if Startup is successful then it gets extra funding from Angel Investors.
And later from Venture Capitalist and then from the IPO (Initial Public Offering)…
With such funding, the equity of the Startup Founder ends up to a great extent, but the company’s ownership becomes diversifies.
In such a case, the future of Startup is not according to the independent entity. After which a large company acquisition or merge with another company. A small business owner may have to lose such a control, but in Startup, this is very important for growth.
If seen, Startup owner and small business owner are both entrepreneurs but both primary functions… and funding are different according to their own business model.
How is a Startup Company different from Business?
Whenever we hear these words “Startup”… We often get confused, what is the difference between these “business” and “Startup”?
If you start any new thing then it is called Business only, not Startup. So let’s see what the Startup Company is all about.
Startup Company basically is very different from traditional business. So I have mentioned some important points below which will help you to understand about Startup Company.
If we talk about Growth
Whenever we talk about a traditional business, there is less scalability for growth. But the point of Startup is different because these companies grow very quickly… and in a very short time the big market captures the entire country.
Most Startups in India are Technology based, which have high scalability at low cost. For example, you can take PayTm, which is a Startup company of FinTech. Now which is showing strong growth in Mobile Wallet Business… and has captured a very large percentage of Online Mobile Payment’s Market in a very short period of time.
If you are selling software in a small market then you will not be called Startup Company. Startup always requires innovation and has high scalability.
Funding for Business
Funding is required in both Traditional Business and Startups to run your business. Traditional Business has only one option for the money, which is Bank’s Loan. Whom they get after giving them securities.
At Startups, there are several ways for funding such as Angel Investor or Venture Capitalist etc… Those who give you money, instead of Shares or Equity, they do not demand any security for you here.
Investors here are looking for high scalability and growth companies which give them a high return. That’s why in these Startups, these investors invest their money, and they also provide them mentorship.
At the Beginning of the exit strategy
If you lose your business in Traditional Business then you can turn it off and choose another business as the ownership here is under you.
In Startup, since funding is by Angel Investor or Venture Capitalist you have to start with Exit Strategy… That is likely to be merged with another company, acquisition by another major company or an IPO. So, here the invest sell his share to another company or people, and exit instead of good returns.
In Traditional Business, Traditional working culture is in India, but there is something else about the Startups. Here the special care of Employees is taken. Here, their offices are made attractive with good perks. Some Startup companies also provide shares to employees with salary, at a nominal cost.
Unique Selling Proposition (USP)
Traditional business has always had the same nature, strategy, and process to do business, but Startups companies were already innovative. So, that their business is simplified and it keeps the better USP within the customer and market.
These were some of the important 5 points that define Startup Companies in India. According to NASSCOM Report India, India is in 3rd position in the whole world. In the Startup Ecosystem.
Advantages and Disadvantages of Startup
Well, there are some advantages and disadvantages to doing any work. In the same way, Startup has both the advantages and disadvantages of working. So let’s know what are the advantages and disadvantages of working in it.
Benefits of Startup
1. Having Unique Experience – You will receive a unique experience in working here. Here there are only gaming rooms and skateboarding in hallways, apart from them there are many resources to work here. It is well known to Startups on how to create a favorable environment of working. To pursue any business, creativity and innovation are needed, for which a stimulating workforce is very important.
2. There is a lot to learn – Startups have a lot of responsibility for the employees so that they get a lot to learn. They choose you because your skill is so good, but the founders expect you even more. You help a Startup to proceed all the way. Often you work more than your job description, which gives you a good opportunity to learn something new. Founders and employees work together, so there is no middle management here because you get to learn from the best people.
3. Employees Work here without any Supervision – They take a smart decision in it and are ready for their results. So that they always get the motivation to move forward.
4. You can Innovate – Startups are required to grow fast. If he does not move ahead in time, he can be crushed. Employees get full opportunities to show their talents. If their ideas prefer a higher official, they are also given incentive for doing such a good job.
5. Being Energetic – There is always pressure to move forward but always drives a dynamic energy Startup to proceed. It is a bit weird to see your company growing and decreasing and sharing this thing with your team brings more happiness.
6. The Perks Here – Not only the money but also you get more other perks which are encouraged to work here such as:
- You can work from home or home
- Having short work weeks
- Very casual atmosphere gym and other health facilities
- Discounts and free services for the employees
Even if we talk about long-term benefits, we can get many things from the company… such as a good position along with the employees also get the good stock option in it.
7. Job satisfaction – Employees share the company’s birth, growth, and success here. That is why it is a very good career path for the generation of the present. They need to be part of a good thing. When the company performs well then he can be proud of how much he contributed in it.
Disadvantages of Startup
1. Having more of workload – Decide that you have to work long hours, get a lot of vacation and get less vacation. Startup always works with the trend and therefore it always happens with the trend to change always take part in the competition. That’s why Employees have to give more effort. It is common for them to be stressed.
2. Job’s stability/security – Even if you like your work a lot, but you cannot keep it for long. Research has revealed that 90% of Startups end in its first 3 years. This is mainly with Tech Startup because the new invention causes much damage to their business.
3. Need for A Mentor – Startup Founders have a very brilliant idea so that they take out very good seed money for their venture. But this does not make them the experienced leader. The lack of strong mentors reaches a lot to their job stability.
4. You cannot earn more here in the early days – Investors never give much salary to aspiring entrepreneurs. They mainly invest more money in operating costs, product development, and customer base. In most cases, salary is less in Startup compared to traditional companies.
5. Lack of social life – Even if you are having great fun in your office, but you have to work hard. Employees have to work in extreme pressure here to reduce the loss. Due to which social life it decreases. Work-life balance is a bit confusing and more work can also show a breakdown in your health.
Startups fight even when they achieve a very big position because… technology is changing and competition is becoming more and more everyday. Here is one of the wrong steps you can make out of the race. Thus the battle of Startup is always alive and will remain the same.
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