A startup company is a business that is in the initial stages of development.
It is usually working on a product or a service which the founders believe will have a high demand.
These companies are initially funded by the founder themselves, but since that is not a sustainable idea for long term business growth, they eventually seek out financial assistance from venture capitalists and investors.
One tool startups need in their business development toolkit is Business Intelligence solutions.
The best BI tools include spreadsheets, reporting, online analytical processing, data mining, and data warehousing.
Having high quality BI tools is essential if you want your startup to grow steadily over the long run.
A startup has different funding stages. The first and the most typical stage is the self-funding or bootstrap startup when the founder invests his own money into his idea. The second stage is where the founder asks his friends and family to become investors.
The third stage is the seed round, in which the founder is finally able to acquire angel investors who are professionals or semi-professionals looking for promising startups. The fourth stage is the growth or early stage and the fifth stage is the expansion stage. The final stage before the company goes public is called ‘mezzanine.’
Even though these companies exist all over the world and in various industries, the term is reserved mostly for companies that are part of the information technology industry. There was a huge number of startups in the 90s thanks to the dot-com bubble, but most of them failed eventually since they had no source of sustainable revenue or had major flaws in their business plans.
But some of the startups did manage to survive even after the startup bubble burst, companies like Amazon and eBay. Most of the startup activity originated from one area in California, known as Silicon Valley. This area is still associated with quite a few startup companies.
A company will no longer be considered a startup after it undergoes certain developments. It could be listed on a recognized stock exchange and be traded publicly. It could be acquired by a large corporation and no longer remain independent. Or, it may fail and cease operations altogether like what nearly happened to General Motors.
Tips for Success
Do you want your startup to succeed? Here are a few tips that will help ensure this happens:
- You should only go into a business venture that you enjoy deeply. You are going to be spending a lot of time and effort in trying to make it succeed. This will be hard if your heart and soul is not in the project.
- Do you possess the necessary skills, determination, and initiative to start the business? Do you have the required physical and mental energy? It is not going to be a walk in the park.
- Try starting a business with someone from your family or a close friend. They can be the sounding board for your ideas and lend a sympathetic shoulder when needed. There are going to be a number of ups and downs when starting a business; people need to have a fantastic support system, especially in times of crisis. You could even choose to press the button for the guidance of mentors at this stage or enroll in some sort of support program for startups.
- Evaluate the current demand for the business venture you are considering. Research the market that you are going to enter and find out everything you can about it before committing yourself to anything. This includes the market size, likely competitors and possible demand for your product or service.
- Prepare a business plan which will give you an idea of whether the startup is going to succeed or not. It doesn’t need to be a complete business plan, but it certainly needs to be more than a couple of sheets of paper.
- Any new business venture will take a while before it can start generating profits. Consider starting off the new venture while you will have a regular source of income. This will ensure you still have the money available while you are getting the venture going.
- You don’t have to wait until the startup is up and running to start searching for customers. Start networking and making contacts from the moment you have formed a business idea.
- Try understanding the intricacies involved in starting a business, including the legal requirements and laws regarding health and safety.
What You Should Do
You could have a thousand potential ideas for a terrific startup, but the success of the venture is going to ultimately depend on the amount of time and energy you are willing to put into the project. So if you have been playing around with an idea for some time now, perhaps it is time you took that idea and turned it into a reality. Who knows? You could have a winner just ready to take flight.