What do we mean by a startup company:
There are several opinions about the concept of a startup company, and these opinions are similar in many aspects and differ in some other aspects.
This difference came as a natural result of the development of people’s understanding of this concept and its diversity according to the environment that embraces it.
First opinion:
A startup is a business in its early stages that is developing a new product or service that it believes the market may need (Source: investopedia).
These companies are immature in their business model and are still searching for the right methods and appropriate markets in order to reach and develop the correct model.
Because the product is new and the market is newly discovered, the start is usually expensive and the income is low.
Given the above, the startup needs external financing from potential investors.
Second opinion:
A startup is a business launched by entrepreneurs to research, develop and validate a scalable business model (Source: Wikipedia).
On the other hand, entrepreneurship refers to all new companies, including self-employment and companies that do not intend to register at all.
Startups refer to new companies that intend to grow significantly beyond their initial founders.
Here in the above paragraph is a turning point between the two opinions, as the second opinion states that the entrepreneur seeks from the moment of launch to develop a model capable of expansion and significant growth.
The opinion we highlight:
We want to focus on the second opinion, which is the company that seeks from the first moment of its birth to develop its business model and accelerates rapid expansion and growth.
In order for this scenario to be achieved, three important factors must be present:
The business model suitable for expansion and significant growth.
Adequate funding for this costly expansion.
Large markets that will embrace this expansion.
Why people care about startups:
For the entrepreneur:
An environment conducive to innovation.
A convenient way to achieve dreams.
A great place for people of strong determination and those who love challenges.
A business with significant financial returns if the business is successful.
For the investor:
The return on investment is very high.
The time period for capital recovery is relatively short.
Possibility of opening other related business doors.
It is very clear that there are great risks that startup companies face in developing their businesses and entering markets, which is why we see great deliberation from investors before they take the decision to enter into bold investments.
How can a startup's risks be reduced:
In short, in order to reduce risks and increase success rates, we must manage our product professionally, and learn the correct principles for this in a way that ensures a smooth, gradual entry that touches on the desires of the market, customers, and technical and financial challenges.
