STARTUP.

INNOVATIVE PROJECT

Accelerate your company with these expert tips on "Startup. Innovative project". Analyse and discover this TIP!

A startup is a temporary organisation designed to discovering, developing and exploiting a business model (see+ TIP) cost-effective, repeatable and scalable, therefore, "A startup is not a big company in a small way". Es a small start-up companies, with high innovative and technological potential, where its model is scalable (see+ TIP) and its growth can be exponential.

A scalable business model is one in which lhe revenues are not directly dependent on the costs, i.e., we don't have to spend more to produce more... which requires be clear about certain aspects when designing the business model, such as being able to anticipate peaks in demand or to generate self-service approaches. This does not mean that a non-scalable business model is not interesting, but its growth vectors are slower and in the investment world it is often assimilated to self-employment (not always the case).

Startup is an early-stage company with some differentiating elements compared to an SME. Unlike an SME, the Startup is based on a business in the use of digital technologies. to be scalable more quickly and easily. The scalabilitywhich has to do with the potential growth of the company, is the second fundamental aspect of a start-up. It is a concept that needs to be applied well and which we practice in the mentorDay acceleration programme (see+).

Startups have a number of differentiating elements that explain their nature

Novelty

Innovation is the essence of every start-up. Often referred to its strong link with new technologies and the internet world. A novelty that is always a competitive advantage (see+ TIP) compared to other companies. It can also be applied to the differential nature of your business or the production processes you employ.

Exponential growth

This type of business must have the capacity to acquire users exponentially, with means of distribution that allow it to reach a greater number of users and customers, as well as a sale that is not linear. J-shaped curve (see+ TIP). Revenues grow much faster than the company's expenses and this is usually achieved through technology.

Reduced costs

In its early stages, in its creation and validation, it does not require large amounts of start-up money. Their link to ICT makes these young companies a very attractive business.

Private external financing

Although start-up costs are minimal, to achieve high growth and consolidate competitive advantages The need for a lot of financing that the banks do not cover, so they need to go to private investors (see+ TIP) that knowing that they assume major risks (see+ TIP) are in the game because of the large profits that can be made if the model works and is truly scalable. 

In the medium term, the startup's earnings are considerable. As a result of this accelerated growth, many outside investors are attracted. These investors are known as Business Angel Investors (see+ TIP). They provide a small amount of funding in exchange for shares or equity in the company.

Objective and risks

Startups take a high risk as their aim is to dominate a niche market (often little explored) in which they work on the basis of hypothesis. This area of uncertainty requires a great capacity to adapt to change. The goal, therefore, is to make these assumptions work, to ensure that the products or services offered are accepted by its customers, while maintaining high profits that allow it to return the investment, guaranteeing the scalability of the business.

It is a temporary organisation

The startup as an organisation has a limited character. There are two completely separate phases in the life cycle of a startup.on the one hand, a temporary phase from SEARCH of the right business model and another phase of EXECUTION of this model. Both phases are absolutely different, and we should regard them as such. 

In the first we will use a series of specific ways of working, instruments and metrics, and in the second we will use a more traditional management approach. Many of these companies disappear within a short period of time or are sold before they find a stable business model. However, there are notable examples of companies that have prospered, becoming benchmark businesses (such as Google), Facebooketc.)

Although the issue is highly controversial, for many the transition of a startup to a repeatable and scalable business model means the end of the startup itself, which becomes a classic company as we know it. Leading tech giants such as Facebook, Google, Airbnb or Uber started as startups, but by now they should be considered big companies.

As the name suggests, startup, the term only applies when the project is in its infancy. Once it has scaled up, it will no longer be called a startup, although as the term is in vogue you can find many veteran companies calling themselves startups.

Explore and discover

In the early stages/years, we have no idea what the customer really needs, how they want us to relate to themHow best to bring our product or service to market or how we can maximise revenue. 

In short, at the beginning we intuit what the ideal business model for our start-up might be... but we must carry out a process of exploration in the real market, in which we validate whether the hypotheses on which we have based ourselves are true, whether the product is adapted to what the customer really wants, what is the best way to exploit the business model... etc..

Profitable and repeatable

The profitability of a business model evolves over time, and typically in its early stages it is not particularly good. This implies that we must continue to question the business model "candidate" continuously, identifying areas for improvement and barriers to conversion. 

The repeatability have to do with the entrepreneur's sales cycle or approach, as sales are initially heroic, highly personalised and hardly repeatable..., so we must be able to generate a repeatable sales model before we start hiring a sales force (if required by the model).

RANKING COMPANIES BY THEIR INNOVATIVE CHARACTER

Companies can be classified into different categories according to their innovative character.

THE FOLLOWING ARE SOME OF THE MOST COMMON CLASSIFICATIONS:

1. Startups: These are start-ups with a high innovative and technological potential. These companies usually have a scalable business model and seek rapid and exponential growth.
2. Technology-based companies: These are companies whose product or service is based on the application of technology or scientific knowledge. These companies tend to have a strong focus on innovation and research and usually operate in sectors such as biotechnology, artificial intelligence or renewable energies.
3. Disruptive companies: These are companies that introduce innovations that radically change the way in which an activity is carried out or a need is satisfied in a given market. These companies often break with established models and have a major impact on the industry in which they operate.
4. Traditional companies with a focus on innovation: These are companies that have been in the market for a while, but have adopted an innovative mindset and have incorporated innovation into their business strategy. These companies are constantly seeking to improve their products, processes or business models to remain competitive in a changing environment.
5. Socially innovative enterprises: These are companies that seek innovative solutions to social or environmental problems. These companies have a purpose beyond the generation of economic profit and seek to have a positive impact on society and the environment.

It is important to note that these classifications are not mutually exclusive and a company may belong to more than one category. Moreover, the innovative character of a company may vary over time, as innovation is a dynamic and continuous process.

HERE ARE SOME EXAMPLES OF COMPANIES THAT ARE NOT CONSIDERED STARTUPS:

1. Coca-Cola: is a multinational company that produces and sells carbonated and non-carbonated beverages. Although it has experienced innovation and growth over the years, it is no longer considered a startup due to its size, global reach and established operations.
2. General Electric (GE): is a conglomerate company operating in various industries, such as energy, healthcare, transportation and aviation. With over 100 years of history, GE has undergone several transformations and acquisitions, making it an established company rather than a startup.
3. Microsoft: is one of the world's largest and most recognised technology companies. Founded in 1975, Microsoft has developed and marketed a wide range of products and services, including operating systems, productivity software and cloud services. While still innovative, Microsoft is no longer considered a startup.
4. McDonald's: is a fast food restaurant chain operating globally. With thousands of locations and a recognised brand, McDonald's has established its presence in the fast food industry and is not considered a startup.
5. Walmart: is one of the world's largest retailers, with an extensive network of shops around the world. Although it has undergone changes and adaptations over the years, Walmart has become an established player in the retail industry.

These companies mentioned above are examples of companies that have already moved beyond the initial start-up stage and have become established and successful companies in their respective industries. Differentiating a startup from a newly formed company can be somewhat subjective, as there is no precise and universally accepted definition of what constitutes a startup.

HOWEVER, THERE ARE SOME COMMON CHARACTERISTICS THAT CAN BE TAKEN INTO ACCOUNT:

1. Innovation and technological approach: Startups are often innovation-driven and use technology to create new products, services or disruptive solutions in the market. They seek to solve problems in novel ways and often have a unique value proposition.
2. Scalable growth: Startups aim to grow rapidly and in a scalable manner. They seek to expand into new markets, acquire users or customers exponentially and generate significant revenue in a short period of time.
3. Unproven business model: Unlike startups that may follow traditional business models, startups are in a phase of exploration and validation of their business model. They are willing to experiment, pivot and adapt according to market feedback and needs.
4. Search for external fundingStartups often require external funding to fuel their growth. They seek investors, whether angel investors, venture capitalists or investment funds, who are willing to bet on their potential in exchange for a stake in the company.
5. Ambition to be disruptive: Startups often have a bold and ambitious vision to transform an industry or change the way certain activities are done. They seek to be leaders and make a significant impact on the market.

It is important toNote that these characteristics are not mutually exclusive and that each company is unique in its approach and situation. Some companies in The newly formed startups may share some characteristics of startups, but it is the set of characteristics and the innovation and rapid growth mindset that distinguishes a startup in its early stage.

ChatGPT can help differentiate a startup from other types of companies by providing relevant information and insights into the distinctive characteristics of startups. By asking specific questions, you can get clear and precise answers that help you distinguish between a start-up and other types of enterprises.

HERE ARE SOME WAYS IN WHICH CHATGPT CAN HELP YOU:

1. Definitions and concepts: ChatGPT can provide definitions and key concepts related to startups, such as their general definition, common characteristics, technological focus, scalable growth and search for external funding.
2. Analysis of case studies: You can request examples and case studies of successful startups, which can help you better understand how they operate and what distinguishes them from other companies. ChatGPT can provide information about famous startups and their achievements.
3. Explanation of business models: You can ask about the different business models typical of startups and how they differ from the models of other companies. This will give you a better understanding of startups' revenue generation and growth strategies.
4. Specific questions: You can ask specific questions about the distinctive characteristics of start-ups compared to other types of companies, such as questions about entrepreneurial mindset, innovation, finding investors or speed of growth.

Remember that ChatGPT es a text generation tool and can provide information based on your prior knowledge, but it is always important to corroborate the information and conduct additional research to get a full and accurate understanding of the differences between startups and other types of companies.

Under Spanish startup law, companies wishing to take advantage of all the benefits provided for by the law must meet all the requirements set out in it ENISA in its startup register (see+ TIP).