Startup commonly refers to:
Startup or start-up may also refer to:
A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses, including self-employment and businesses that do not intend to go public, startups are new businesses that intend to grow large beyond the solo founder. At the beginning, startups face high uncertainty and have high rates of failure, but a minority of them do go on to be successful and influential.
A startup studio, also known as a startup factory, or a startup foundry, or a venture studio, is a studio-like company that aims at building several companies in succession. This style of business building is referred to as “parallel entrepreneurship”.
A startup company (startup or start-up) is a new and fast-growing company. They try to meet a marketplace need, offering an innovative product, process or service.
A start-up is usually a small business, a partnership or an organization. Rapid growth is what they aim for. Often, startup companies use the internet, e-commerce, computers, and telecommunications.
The term became fashionable in the dot-com bubble of the late 1990s, when a great number of internet-based companies were formed.
Some startups become big and they become unicorns, i.e. privately held startup companies valued at over US$1 billion. The term was coined in 2013 by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures. According to TechCrunch, there were 452 unicorns as of May 2019, and most of the unicorns are in the USA, followed by China. The unicorns are concentrated in a few countries. The unicorn leaders are the U.S. with 672 companies, China with 182, India with 74 and the U.K. with 51.
Idealab, founded by Bill Gross in 1996, was one of the first to introduce the ‘incubator industry’ to the field of technology startups, and has started over 75 companies. Idealab was founded to test many ideas at once and turn the best of them into companies while also attracting the human and financial capital necessary to bring them to the market.
The startup studio trend gained momentum beginning in 2008. As of 2015, there were over 65 startup studios across the world, of which 17 had been built since 2013. As of 2022 there are more than 780 startup studios across the globe.
A builder startup studio focuses on creating and developing a company, mostly from internal ideas. Notable examples of this model are Atomic, Pioneer Square Labs, Rocket Internet, and eFounders.
Unlike business incubators and accelerators, venture builders generally don’t accept applications concerning their portfolio of companies, and the companies instead “pull business ideas from within their own network of resources and assign internal teams to develop them.” In the wake of the tech revolution in the early 2000s, the startup studio sector experienced a surge in growth. This led to the emergence of several studios, which modeled themselves after Idealab, seeking to demonstrate the efficacy of their successful model. During this era of technological advancements, leading studios like Rocket and Betaworks established themselves as independent entities by launching scalable businesses to meet the growing demand and adapt to the changing landscape.
According to VentureBeat, Nova Spivack was “part of the early technologists who pioneered the venture production studio model. He wrote about the model in 2011 at a time when most of its production elements were still in gestation. Nova actually invented the Venture Production Studio term, calling it a ‘new approach to building startups.'”
See also: Venture capital financing and Corporate venture capital
Investor venture studios bring in early-stage external startups and help them grow by providing them both funds and expertise. Studios Betaworks, Colab(Venture Studio), and Science, Inc. fall in this category.
Startups typically begin by a founder (solo-founder) or co-founders who have a way to solve a problem. The founder of a startup will do the market validation by problem interview, solution interview, and building a minimum viable product (MVP), i.e. a prototype, to develop and validate their business models. The startup process can take a long period of time (by some estimates, three years or longer), and hence sustaining effort is required. Over the long term, sustaining effort is especially challenging because of the high failure rates and uncertain outcomes. Having a business plan in place outlines what to do and how to plan and achieve an idea in the future. Typically, these plans outline the first 3 to 5 years of your business strategy
Models behind startups presenting as ventures are usually associated with design science. Design science uses design principles considered to be a coherent set of normative ideas and propositions to design and construct the company’s backbone. For example, one of the initial design principles is “affordable loss”.
Because of the lack of information, high uncertainty, and the need to make decisions quickly, founders of startups use many heuristics and exhibit biases in their startup actions. Biases and heuristics are parts of our cognitive toolboxes in the decision-making process. They help us decide quickly as possible under uncertainty but sometimes become erroneous and fallacious.
Entrepreneurs often become overconfident about their startups and their influence on an outcome (case of the illusion of control). Entrepreneurs tend to believe they have more degree of control over events, discounting the role of luck. Below are some of the most critical decision biases of entrepreneurs to start up a new business.
Startups use several action principles to generate evidence as quickly as possible to reduce the downside effect of decision biases such as an escalation of commitment, overconfidence, and the illusion of control.
Many entrepreneurs seek feedback from mentors in creating their startups. Mentors guide founders and impart entrepreneurial skills and may increase the self-efficacy of nascent entrepreneurs. Mentoring offers direction for entrepreneurs to enhance their knowledge of how to sustain their assets relating to their status and identity and strengthen their real-time skills.
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