Question of the day

A start-up is an organisation that launches a product or service to address a problem in an innovative way.

Different experts give different concepts to the start-up. For some is an organisation, for someone is a company, for someone it is a business in the early stages.

“A five-year company can still be a start-up”, defines Paul Graham, Head of the Accelerator Y Combinedor. So, the concept of time does not define when a start-up ceases to be so called.

The start-up has a reproducible and scalable business model

One clear thing is that: the key attribute of a start-up is its ability to grow. A start-up is a company designed to escalate very quickly. This focus on growth without geographical restrictions distinguishes start-ups from small businesses. A restaurant in a city is not a start-up, nor a franchise can be appointed as a start-up.

Traditional business duplicated what has been done so far in that area. A potential restaurant owner can create a franchise of an existing restaurant. This example works based on the existing template of how a company should operate. But it aims to create a completely new action plan.

Start of the start – prototyping (MVP)

The prototype is transformed into a product that is full, transformed and grows, often increasing. In the meantime, the start-up attracts investment several times, the team is increasing, also increasing the complexity of the product.

Finally, the aim of starting a start-up is to sell it to a large corporation or list its shares and continue to operate as a separate company.

The development cycle of a start-up goes through five main steps:

Initiation phase — market research, development of an action plan, preparatory work, first negotiations with stakeholders.

Launch phase — the launch and the first weeks of work are the most critical time in a start-up life.

Growth phase — the time a start-up has already taken a stable position in the primary market and is moving with confidence to achieve the objectives outlined in the business plan.

Expansion phase — when the primary market cleaning plan is almost complete and the business expands into other markets, including by buying other start-ups.

Exit — exit of original founders and subsequent sale of the business to strategic investors. In case of failure, “exit” is considered as closure of the business.

So a start-up is not just a company at the beginning. A start-up is a company created by ambient people, who are ready to promote their project at all costs. As start-ups do not always have funding, investors come to help, attract the opportunity to do money.

Source: money.md