Just think of yourself as a 23 old graduate with a lot of zeal and an incredible idea that can change the world. It may be about modernizing the tiffin system of Mumbai and implementing it in Delhi or about connecting folk artists and helping them to save their dying art. You are constantly thinking about how to turn the idea into reality; you have researched but are unable to find a path; you have limited amount of funds but you are not ready to give up!
Almost all startups began like that, with an idea, faith, passion, dearth of funds, and dedication. Many startups which began a decade ago or even later are valued in billion dollars today. Be it Facebook, SpaceX or if we talk about India, then there are Byju’s, Policybazar, Zomato, Sugar and the list goes on. They start small and with their innovations, skills, team, and research, they become big. So big that everyone knows them and talks about them.
Today, Startup has become a new go-to word. Most of us want to have one. However, few of us exactly know what a Startup is. A Startup is nothing but refers to a business that is in its earlier stages of operation. It is a newborn baby in the business world. It can be found by the entrepreneur(s) who have an idea that can result in the development of a new product or service. It involves high cost, low revenues, and an unfathomable level of dedication.
Before, thinking about kicking off a startup, it is important to look at some of the considerations that are important for the startup world, which is as follows:
- Location: It is important to understand that is the startup going to have a physical presence or just a virtual presence. It usually depends upon the business of the firm. For instance, WhatsApp is a messaging app, they do not need physical stores to interact with their customers. On the other hand, if we talk about a startup that needs to give a demonstration to customers, physical stores are required.
- Funding: There is no exaggeration in saying that the life of a startup depends upon funding. If a startup does not get the right amount of funding at the right time, every effort can do down the drain. Generally, startup founders use their funds in the initial years for the research and other beginning activities. Afterward, they try to raise it through venture capitalists or angel investors, or private equity
funds. - Form of business: It is important to think that whether the startup is going to be a sole proprietorship, partnership, a private company, one person company, limited liability partnership as the legalities are going to depend upon it. Different structures have different formalities, failing to do so can result in fines and imprisonment.
- Laws: If you are thinking about opening a startup, it is important to be aware of the legal scenario. Be aware of the different contract terms and deeds, laws regarding labor and employees, taxation and accounting, intellectual property, registration, and so on. Again failing to comply can have unfavorable consequences.
Initial years are crucial for a success of a startup. Many startups fail in the initial years as they are unable to find funding. They may be in the wrong market, trying to target an audience that is not appropriate for their product. Other reasons could be a lack of research about the industry and other stakeholders, failure in innovation, poor marketing, ignorance of customer feedback, pricing and costing issues, lack of dedication, etc. They can be avoided by keeping the startup aligned to the market requirements. Whenever the market segment sentiment changes, innovate the product. Another way to avoid this is to hire the right team who can make tough decisions about the startup and the product or service. Now, the startups which have done well and managed to reach a dollar-billion valuation are called Unicorns. Grammarly, Urban Company, Cred, Pinterest, Uber are all examples of Unicorn. These startups have innovated well, high in tech, and understand the market that they serve. They are recognized and well placed in the market and have slight chances of failure. However, that does not mean they can’t fail, they constantly need to experiment and hustle if they wish to survive.
Initiating a startup is a tough job. There are many failures (e.g., Beepi, Google Glass, Yik Yak) and there is a lot of time, money, and commitment involved. Therefore, make sure that whenever thinking about it, you are aware of the nuances of it. If not aware, take the help of people or organizations.
Here, at Agility Ventures, it is our expertise to make aspiring startups aware of such nuances. Our consulting Services division is a one place stop to seek help in making critical decisions. So, whenever in need, reach out to us, we will be happy to help you out.
