What is a Startup and why are they Important?
Startups are at the forefront of change in many companies that are forced to adapt to digital innovations in order to stay afloat in the competitive struggle in the business market. Find out what their essence is and why they may be relevant as a large-scale marketing offer for your business.
What is a startup?
The term "startup" is used to refer to developing companies or enterprises that have recently been created to commercialize products and services using ICT or information and communication technologies. This is a scalable business model that is growing rapidly and can be maintained for a long time due to its technological component, which is less expensive compared to that used in traditional companies. Startups are characterized by the fact that they allow you to develop an innovative business, with minimal costs and rapid growth. They can be financed by private investors without requiring large amounts of capital since the intensive use of the technologies available to them allows them to obtain economies of scale, which significantly increases their income. Their main tool is internet marketing, through which they manage to make their brand known, and special attention is paid to the customer service department, which employs highly qualified and constantly developing employees. Therefore, they can be defined as a human organization with a great capacity for change.
The importance of startups
Startups keep up with market trends and offer fast innovative solutions to meet the needs of a certain group of users with certain consumer habits. They maintain close contact with their customers and offer them direct and personalized service. As an entrepreneur, you should know that a traditional company is less susceptible to change, but competition forces it to evolve from day to day if it wants to continue generating income that will allow it to remain operational. In this sense, startups bring talent and provide the necessary technologies to facilitate their digitization. In other words, there is close cooperation between startups and companies that have a common goal — to quickly climb the business ladder. Each startup has a basic idea with which it seeks to reduce processes and simplify complex tasks in an innovative way to meet the needs of users with whom it maintains constant and open communication, which leads to a massive focus on its sales.
What is the difference between a startup and a company?
Startups are enterprises whose activities are innovative in nature, they develop technologies and design web processes. These are venture capital companies or companies created to work in conditions of extreme uncertainty. They have different goals that are achieved digitally, while the company corresponds to an organization structured to implement a certain business model defined earlier. In a word, although there are various types of startups, this is a mobile enterprise designed to find a business model focused on the preferences of a certain group of customers, the company follows the scheme of work previously established when it was created.
Why do startups fail?
The creation of a startup goes through a lot of pitfalls, despite the fact that there are hundreds of magazines and bookstores specializing in the path that must be followed in order for the idea to become a reality in the form of an enterprise. Many startups fail, and this has been analyzed by experts in the field, who concluded that the reason is that they simply do not offer a product or service that is currently in demand in the market. It is possible that the startup was created after hard innovative work and backed up by previous marketing research, but if it does not solve the user's needs, it will not reward him with a purchase. An example of this is the closure of intronet, a startup that competed with Linkedln for three years and which, according to one of its founders, failed because it could not offer what the market demanded at the time of its creation. After analyzing several closed startups, it was found that the main reasons given by the founders of these companies are the following:
Unnecessary products on the market.
Lack of liquidity.
Inadequate working team.
More successful competitors.
Problems with setting costs or prices.
Poor consumer experience.
Lack of timely attention to consumer messages.
There are several factors influencing the success or failure of a startup, but these are undoubtedly business models with great potential if they are focused on covering market trends and consumer needs of people in a creative and innovative way, always tied to close and direct contact with each of their customers.
By Nikita Bondarenko
President of YNBC