A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable economic model. While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to become registered, startups refer to 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. Some startups become unicorns; that is privately held startup companies valued at over US$1 billion.
Although the definition of a startup does not emphasize that it must be in the field of technology or information technology, but because many startups in recent years have been formed around these areas, sometimes in the definition of a startup to It also points out that startups must be active in the field of new technologies.
Startup History
If we want to deal with the history of startups, we can certainly tie its beginning with the beginning of civilization among humans and the sale and purchase of various products. But the concept of startups dates back to around 1911, when it began with Silicon Valley companies. One of the company’s most important products was the IBM startup, named after International Business Machines. In the following years, this startup succeeded in introducing itself as one of the software development giants in the world.
Another of the oldest and most successful startups in the world is Apple, founded by Steve Jobs, and you are all familiar with how this person came to be and how difficult it was to get this startup. But another world-famous startup that we are all involved with is Google Startup, which came up in 1997 and launched its product in 1998. Today, Google search engine can be introduced as the most complex and powerful search engine in the world.
Why is starting a startup so attractive?
In this section, we want to answer one of the ambiguities that arose in the first paragraph of this article. You may also be wondering why most people who want to start a business prefer to use the word and concept of startup for it? We have to admit that this is more of a psychological issue, and of course in some cases, government support for some companies causes them to stick this label on their business.
If we consider starting a startup as the beginning of a new business, the psychological aspect of this issue stems more from the fact that all human beings are looking for new challenges and in fact being seen. When a person launches a new and attractive product in the community, the number of people who choose this product and consider it as their first choice, determines the success rate of the startup. Therefore, when a person takes a risk on a new work and comes to the conclusion that the product in question causes it to be seen and even branded, he tries to present this work in different ways.
The difference between startups and traditional businesses
Startups grow in stages
It is better to think of a startup as an onion that goes through its growth stages step by step and reaches maturity. In a traditional business, however, a new job is usually funded and the sales process begins immediately. For example, if you build a new shoe, market it, grow your customers, and grow your business, you have meticulously implemented the concept of a startup. But if you rent a shop and put shoes from different brands in it and sell them, you have used a traditional style.
Startups are developed on a scientific basis
The important thing about startups is that their development is based on scientific principles and even their advertising and sales are done according to the scientific principles of the world. So when your goal is to start a startup, you need to learn a new knowledge and develop it over time. In a traditional business, however, you can learn all the steps from your father or teacher and enter the job market immediately.
Steps to start a startup
Given the definitions and cases mentioned in relation to the concept of startup, here we need to introduce the steps of setting it up in detail and step by step so that you can also use it as a template for starting your business. use. Of course, some people may add a few more minor steps to these steps, depending on their tastes. But if you are planning to start a startup, you need to follow the following steps carefully:
1. Ideation
The concept of a startup starts with an idea, it may be creative and new, or it may come from a foreign or domestic business. For example, a new business is not always going to be based on an invention, maybe a creative person can make a small change in a tea flask to get customers’ attention and sell it as a product. So the idea of a startup is not always going to be complicated and heavy or cost a lot of investment.
If you search the Internet for the word best startup ideas, you will probably come across several options, some of which may seem ridiculous or impossible at first glance, but you will find that a group of hard-working young people have been able to monetize these ridiculous ideas. They are now active in several parts of the world. So never be afraid to come up with ideas for entrepreneurship.
2. Research and determine the roadmap
The second step you need to take to realize the startup concept is to pick up a white paper and write a roadmap. In fact, it’s a rough idea of your idea and its outline, and you need to figure out where you want to go. As you take the first step with ideation, it is better to be a little imaginative and advance your goal as much as possible.
Once the final goal has been determined, it is time to break this path into several shorter paths and actually set several short and long goals for yourself. For example, if you are planning to travel to another city, you must specify which village or town you will reach and what your goal is.
Next, you need to research. Having a raw idea is good, but it is just as dangerous and may get you off track. Research includes various reviews of the product as well as customer satisfaction with the product. The best place to start research is to ask your family and acquaintances to comment on your idea and let you know if there is a problem with it.
3. Registration of ideas and claims of ownership
The previous step should not be beyond the reach of reliable family and acquaintances, the reason for this is simple, to prevent the disclosure of the idea. Do not forget that the idea is something new and the minds of different people are different. You may have come up with an idea that other people have never thought of.
Therefore, in the third stage of starting a startup, you should go to register the idea and claim ownership. If your idea is repetitive and taken from other national and international companies and businesses, your work is not so hard and you do not need to go through difficult steps to register it.
But in some cases, we see inventions and creative ideas by people who do not have similar examples nationally and internationally. If you take the risk of disclosing it and sharing it with different people, there is a possibility that your idea will be stolen and people may have the necessary facilities to reach the result faster. To register your patent and innovative idea, go to the Intellectual Property Center information database and follow the steps of your patent so that you can claim ownership. All the steps of doing a patent are taught on this website. After doing and registering it, you will be given a patent certificate with which you can claim your ownership.
4. Preparation of prototype
Different ideas are defined in the form of a startup concept, each of which goes through a different path. Some of these ideas are services and do not require prototyping, others involve laboratory prototyping, which is the main step in this prototyping.
So first determine what your final product will be and is it possible to produce a prototype of it? notice that:
- Service work does not require prototype production, but research is required
- Laboratory work is dependent on prototype production and requires research
- Internet ideas are easier to prototype and should be done faster
- Prototyping is more difficult for a particular product and should be avoided
- Prototype production for a product should be accompanied by research on marketing and customer needs.
So if you have determined what your final product looks like, you need to see how people in the community react to its prototype. Therefore, try to produce some prototypes whose quality is acceptable to the general public.
5. Offer samples to small target community and market research
In the second step, we suggested that you show your idea to your close people and family and ask for their opinion. But at this stage, you can develop your target community, given that you have registered your idea and can claim ownership. Generate a few items or prototypes (preferably 100 samples for physical products), and provide them to your target community, along with a survey form. Ask these people to use the product and comment on its different conditions.
Your survey form can include the following:
- Product work quality
- Product appearance quality
- Product service quality
- Reasonable price for the product
- Suggestions for improving the quality of product work
- Customer desire for the product
- Probability of product success in the market
- Product performance needs and shortcomings.
Preparing this survey form is largely a matter of taste and may change depending on the type of product and its services. But always try to get different suggestions from your target community and ask them to comment on your product very quickly and face to face. These ideas will help you in the next steps and are one of the main factors in the success of startups.
6. Registration of ideas and products
In the previous step, you have registered your idea and given yourself the chance to claim ownership of it. But this claim does not apply to products derived from it, and people may use similar products or even better features. So you should register your idea and product with legal authorities and make sure that no one else uses your products.
The prerequisites for doing this are the same as the patent process, and you can do this from the Intellectual Property Center information base to make sure the next steps and your product is not copied. The concept of start-up is associated with risk, and you should do your best to eliminate these risks.
7. Find an investor
One of the most important steps and perhaps the biggest challenge for starting a startup is finding an investor for the project who can take the risk of investing in a new idea. We mentioned above that startups do not always start with new ideas, and in some of them duplicate ideas or ideas implemented in other countries may be implemented. Therefore, it may be possible to find an investor after a while, but it is necessary to determine the type of investment.
5 Types of Investors for Startup Ideas
There are many problems and issues for investing in this field and a startup must be able to find the investor it needs. Investors in the financial market are generally divided into five groups:
banks
Banks are the oldest and most classic investment groups in various fields, and usually they are invested in a way that does not directly affect the profits and losses of the project. Currently, there are several banks in the world whose entrepreneurial profits are variable, but in general, in order to use the capital of these banks, it is necessary to prove to them the different stages of the project, or in some cases, a person may need to make a deposit.
Angel Investors
Angel Investors or Angel Investors are people whose investment is more than $ 200,000 per project or who prefer a net worth of up to $ 1 million. These people are found in a variety of industries and are usually looking for lucrative entrepreneurship projects; What is clear is that they cannot own more than 30% of a startup. Angel Investors invest directly and personally and are usually aware of all of the company’s financial processes and have the right to sign. The important thing about this investment model is that they are not in a hurry to return the capital and usually take a period of 3 to 8 years.
Partnership investors
Partnership investors share in the profits and losses of small businesses. These individuals enter into a financial agreement with the entrepreneur from the very beginning of the work, in which they are reminded that in return for financial support and investment, they are fully or as a percentage involved in the company’s profits and losses.
Voluntary investors
Voluntary investors are ideal for heavy projects and high-cost projects, and can usually invest up to $ 10 million in a project. These people are ideal for those who follow laboratory projects and need advanced equipment in the course of their activities, and help them to complete the various stages of the project using the financial capital and social credit of the investor. How these investors get involved in the startup’s profits and losses is negotiable and they usually prefer to accept a percentage of the project cost.
Personal investors
Perhaps it would be better to introduce this investment as a family investment or a family investment. Suppose you are looking to start your own startup and you are trying to find a reliable investor. In this case, you go to acquaintances, friends and family and through a joint venture, you pay for the project. How to repay this investment may be accompanied by cash dividends or these people may participate in the final result of the project.
Types of investment models
In the previous paragraphs, we introduced the types of investors and showed the role of each of them in the concept of startups. However, our definition of investors in any form, the very important point is what this type of investment is like. To understand this, we have divided the types of startup investments into three categories:
Property investment
Property investment is defined as a type of investment in which the investor takes ownership of part of the project in exchange for allocating credit. Suppose you invest in a livestock or agricultural project and you own part of the project for the money you give to the group. The same method applies to startups and the investor can take a percentage or all of its shares.
Lending investment
This method of investing is more like lending money to a project and in return you only receive the profit or cost of your investment. In this method, the investor undertakes to consider the necessary credit for the project, and finally, after producing the product and presenting it to the market, he receives his initial money along with its profit. Banks and institutions such as science and technology parks are usually active in this field.
Partnership investing
In partnership investing, as in equity investing, the investor is responsible for financing the project and in return receives a percentage of the start-up’s share. The difference between this method and ownership investment is that in the partnership method, only up to 45% of the shares are allocated to the investor and the main owner of the project is the entrepreneur and the startup startup group.
What is a startup accelerator?
The startup accelerator can actually be considered as fuel and gasoline in the concept of startup. Accelerators are individuals or companies that are responsible for supporting a start-up company and guiding them through the training, production and sales process. Accelerators can fall into any of the three categories of investment, but accelerators are commonly known as a corporate investment group that owns only up to 45% of the group. Numerous external accelerators have been introduced on the Internet, and each of them tries to offer special privileges to startups in order to attract them.
How to find a suitable startup investor?
Given our definition of a startup investor, the question probably arises for you: How do we find the right investor? Can we trust anyone with any amount of financial capital? Some institutions, such as banks or even government-owned science and technology parks, may be more reliable and easier to trust. But the following strategies in the field of startup concept can help you:
Know your investment options
When your main plan is to start a startup based on a raw idea, naturally you can not trust any kind of investment and with any amount of money. So the first thing you need to do is determine how to raise your financial capital.
- Do you want to use bank loans?
- Is there enough capital among your friends and acquaintances for this project?
- Eventually you may need laboratory equipment?
- Do you want someone involved in your project?
- Do you feel that you can repay the loan or debt in a certain period of time?
- Do you involve the investor in the profits and losses of your company?
If you can answer these questions clearly and accurately, it is likely that a large number of your options will be eliminated and you will find only a few that are easier to judge. Of course, note that there must be a return route in each route to be able to use any tool.
Make a list of investors
We assume that you have completed the previous step completely. Here you will probably come across several options, each of which may fall into one of the above five categories. Design a table and in this table identify 5 groups of investors and determine what role each of them will ultimately play in your project. If you can do this step correctly and with the right decision, it means that you have categorized them accurately and you can take your next step with more confidence.
Have an interview and talk to investors
One of the most important tools that an entrepreneur should have in starting a startup is the ability to negotiate and interview. Here, you should negotiate with all the investors listed on your list and make time for their interviews. Depending on your priorities, take turns talking to these people about your project and its outcome. Try to describe your main goal and clearly ask them to tell you their purpose about this investment. Attending this interview will show you the art, and some investors’ ideas and thinking may even cause you to abandon your original approach and move on to a new page.
Legalize your agreements
In the words of the ancients, “the word is the wind”. This can be one of the best tips and advice in starting a project. You will probably encounter many people along the way, all of whom will push you forward, and you will probably receive several promises of financial assistance and facilities, “This is the essence of the startup concept.”
But rest assured that in the difficult and complex stages of the work, most of these people take back their word and you can not even find them. This is much more risky when it comes to investing in a startup and can even lead to the failure of your project. So if you are talking to an investor and reaching an agreement with them, be sure to bring all your agreements in writing and in the form of a contract and ask them to stick to their contract to the end.
Start mass production
At this stage, your business gradually takes on the concept of a start-up, and we can almost introduce it as a start-up company. Naturally, in the previous stages, there have been reviews of the prototypes and basics, and according to the feedback received, there have been changes in the products or services. Also, the presence of the investor makes the team members enter the production process in a better mood and the necessary preparations must be made for mass production. Of course, mass production must be done in several phases in order for the cost and revenue control process to be done properly.
Do not forget advertising and marketing
The last step that peaks the growth of startups is the advertising and marketing phase. In the previous steps:
- A product was produced
- It was exposed to a lot of people
- Its strengths and weaknesses were seen
- There were changes in it
- An investor was found to start
- Its mass production took place in several phases
- And now it’s time to sell and offer it to customers
Advertising and marketing means the awareness of people and customers about a brand. A startup product cannot compete with other competitors in the market unless the advertising and marketing process is done on it. On the other hand, customers are not very willing to use such products. So at this stage, a startup team should go to a marketer and ask them to promote the team product. There are several ways to advertise, some in the form of online advertising and some in the form of environmental advertising, depending on the access of the group, one or more of them may be selected.
Introducing different types of startups
By going through the above steps, it is practically possible to start a startup and it can be claimed that it will lead to the sale of a product or the provision of services. In the first step, we mentioned having an idea that was new or adapted from another company, but in this idea, it was not clear exactly how the work was going to be done and what kind of startup it was. Here we divide startups into six general categories, each of which may have other sub-layers:
Lifestyle active startups
The concept of lifestyle startup includes projects and works that are related to the lifestyle of different people. In fact, the purpose of launching these startups is to help improve the lives of people in the community using various methods. For example, one group may be trained in cooking techniques and another group may be involved in maintaining family health. Now, the work of this group may be done virtually in the form of internet teams or they may launch their project in real space and as a real company.
Small startups (family businesses)
These groups are mostly small businesses and are usually run by families. Suppose a family decides to start a service company and make money by serving the community. Some friends or acquaintances may even agree to produce a particular product, such as a shoe, and to fund the launch as a partnership. The important thing is that these models do not make much profit from the jobs, but they will have good job stability.
Scalable startups
There are startups in this category that, in addition to thinking about high profitability, also dream of globalization. They are constantly thinking of making their business bigger, and they are constantly looking to raise capital to grow. The most important of these startups are Facebook and Uber. Such companies either succeed and achieve their dream of globalization, or they fail altogether.
Small startups affiliated with large companies
These startups, on behalf of large companies, have a duty to act to improve their performance. There are different criteria for the work of this group, and they mostly try to have a study aspect of their work and take initial steps for larger companies. For example, a large company decides to put an x product among its products. Therefore, this group is obliged to examine the market situation and customers in relation to this product or service, and if successful in this area, to provide the conditions for the presence of a larger company. There are other categories of such startups that sell and market the products of large companies.
Startups active in the field of social networks
With the growth of social media and more access to these tools in the community, the field of entrepreneurship in this sector has been able to play its role well. You’ve probably read a lot about making money online using tools like Instagram, Telegram, and Facebook, and you know that even one person can make money in this field individually. But some idea makers prefer to enter the field as a group and easily design online software or an application to easily provide the conditions for earning money online. There are several examples of these teams in Iran and around the world that you can find successful examples of them with a simple search on the Internet.
What is a line startup?
lean startups is a special concept in starting new businesses that greatly reduces their risk-taking and in a way increases the confidence of product sales. In the traditional sense of startups, the process of producing a product and launching it to the market is done without studying the customers, and usually a high percentage of startups fail and fail.
The concept of Line Startup was first proposed by Eric Reese and Steve Blank, which is based on customer development methodology. In this way, the entrepreneur is given the opportunity to work simultaneously on the production of a product or service as well as study on customers. This means that the entrepreneur has both the opportunity to produce his product and can examine the market and customer situation. Thus, line startups help start-ups find themselves in the market much faster and reduce their failure rates. Of course, this method is very broad and broad, and we will try to address it in the next articles.
What contributes to the success of the startup concept?
The concept of a startup reminds us of many things and shows us that a new bud needs a lot of care to grow. The most important stage in the growth of a tree or a plant is the early stages of its growth, and if they pass this stage to health, its ability and tolerance to various conditions will increase. Therefore, in the case of startups, we encounter similar cases, each of which can affect the success of these young seedlings:
1. Founders
The leader of a team can help them in different opportunities and create the conditions for their success. A leader or supervisor makes important decisions, examines the views of others, and creates the conditions for the group to move toward a specific goal. An incompetent leader may jeopardize the decision-making process in a group and even destroy the team spirit of the group. The concept of start-up means that a group gathers together and follows the collective wisdom. So choosing the right leader or supervisor can help you make effective decisions to ensure the growth and start-up of a successful business.
2. Team
Never forget that a startup in its hidden meaning means a team looking for a dream. Like a football team, all members of a team move towards the same goal, and the more coordination and similarity these members have with each other, the more guaranteed their success is. There is a possibility of mistakes by everyone in the community, but if the members of a team can have the necessary support for each other and accompany the team in various challenges, it will not be difficult for them to follow the path of success.
3. Growth strategy
We mentioned in the start-up process that having a roadmap is critical and plays a crucial role in a team’s success. Accelerating the work process in some stages and slowing it down in challenges is considered a movement strategy and causes all team members to follow it. Keep in mind that in the process of growing a business, there is never too much growth too fast or too slow, and it is the team members who, according to the roadmap, help it move and succeed.
4. Startup product
As an idea maker, you may go for a great and attractive product that you have always dreamed of achieving and producing, but that does not mean that others will like it and it will be welcomed by the society. Sometimes you may conclude in your specialty that producing a product can help the community, but if that product is not accepted by the community, you need to prepare for failure. That’s why, after brainstorming, you should study the community and determine a roadmap to see how the community reacts to this product and whether it is well received for the success of your business.
5. Marketing
The last topic we mentioned in the discussion of the concept of startup is marketing and marketing, which is responsible for introducing and delivering your product and services to customers. Keep in mind the fact that a product with an unknown brand is less noticeable and not exciting for customers. Do you, as a shopper in the store, look for well-known brands or do you use ordinary products? So give us the right to consider marketing important in the startup debate, and we recommend that you do your best to get through this step successfully.
What contributes to a startup failure?
In the previous paragraph, we mentioned what can guarantee the success of a startup. But sometimes there may be factors and factors in the path of this team that cause all their efforts to be wasted and unfortunately lead to failure. For example, in some of the cases mentioned in the previous paragraph, a shortcoming in any of them means the failure of the team and the loss of their product. Our team at Webmaster has reviewed various startup teams across the country and concluded that the following 7 factors are influential in their failure:
Inability to understand customer needs
Those looking to start a startup will eventually want to produce a product and showcase their ideas and sell them to a customer. Naturally, selling a product with very high technology in small cities can not be a good idea. An idea to become a product is right when a customer is found for it. Therefore, marketing teams and initial idea reviews should focus on the needs of customers and pay attention to what products people in the community are more inclined towards and what this product meets their needs.
Lack of attention to prototype feedback
In the start-up phase, we mentioned that the prototype plays an important role in the success of the work. When you develop an idea, you have to produce a few prototypes of it (for example, 100) and divide it among different sections of society. If your business is online, you can create 100 demos and send them to others to get the feedback you want. This step is not for profit or even to study the market; Rather, it gives you the opportunity to expose your product to the judgment of different people in the community and receive their feedback. If you react inappropriately to these feedbacks and ignore them, you can be sure that your path to the bridge will fail.
Planning with the aim of earning money and not having the desire to work and toil
If your primary motivation is simply to make money, your character does not fit into the concept of a startup, and it is best not to start over. The simple reason is that in order to be successful, you will probably have to work more than 15 to 18 hours a day, and you may even fail in several successive stages. An entrepreneur knows that he will succeed in the end and even sees the end of his path. In fact, they know that earning money takes longer and cannot be achieved in the short term. Lack of enthusiasm discourages other team members and abandons the idea.
Lack of skills to succeed
If you think that the job of an entrepreneur is to think big ideas and hire other people to do the job, it is better to think again about the concept of startup. One of the main reasons for the lack of success of these projects in the beginning is that leaders and supervisors can not provide what is needed for success. Starting a startup starts with a raw idea, and it is the entrepreneur who has to process the idea in different ways in order to get a good product from it. A lot of effort, knowledge, time and consultation with the best people in this field will prevent the failure of an idea.
Insufficient ability to raise capital
In the previous section, we introduced the types of investors and performed various steps to find a suitable investor. Finding the right investor for your project and idea is a real art and helps us overcome many of the project’s financial challenges. An important point about the success of startups is the discussion of raising capital in the next steps. When you are in the production phase of a prototype or pilot and you are just doing the study work, your costs are less than when you get into mass production. So if a leader or supervisor can not provide enough capital with the requirements of the project, the probability of failure of startups increases or their growth process may be reduced.
Weak leadership and team
As much as a strong team and strong leadership help a startup succeed, it can also cause it to fail. Selecting team members solely on the basis of scientific or marketing skills can not guarantee the success of a project, but both team members and leadership must be in one body and all of them must strive for success. The presence of these people together is like the presence of people in a ship that may be on its way to the shore of success or fail in one of the storms along the way.
What is a startup weekend?
The latest discussion on the concept of startup is Startup Weekend, which is an educational and experimental gathering for entrepreneurs and idea makers to share their ideas and be judged by judges. And put coaches. This program is important because it has a large number of participants and is implemented in prestigious countries around the world.
The start-up process of the start-up weekend is that the participants gather in one place and present their ideas. Those who have an idea are given 60 seconds to talk about their idea and get the participants’ attention. After each of these ideas is presented, the participants are attracted to one of these teams and together they provide the ground for commercialization of the desired idea. All these steps are done in three days.
The closing ceremony of the conference includes the introduction of top ideas and top startups, which includes people who have been able to introduce the best possible solution for the commercialization of the desired product. The program runs for 54 hours and individuals can form their own team from among the participants. Startup Weekend Gathering is one of the best tools for implementing the concept of startups in the community, and usually every year some of these ideas are supported by financial resources.
