“A start-up is a company working to solve a problem where the solution is not obvious, and success is not guaranteed.”
‘Start-up’, we all must have at least once in our life thought of a start-up, but either we did not start, or we failed and did not try again, right? One of the main reasons for this can be a lack of knowledge and a lack of proper methods to start a company. Let’s understand the concept to build a business from scratch.
The basic definition of a start-up is majorly a young company founded with less money raised by family, friends, or by themselves. The main aim is to build a strong audience, develop new products or make beneficial improvements in current services.
Start-ups have a high chance of risks and failures. They are also called ‘Risk Investments’. The best way to make a competitive advantage is to innovate a new product or business model that would attract investors. Strong founders ensure that the company lasts longer.
For turning a start-up into a great company, one should know the fundamentals. It is an independent firm or entity to improve, operate, and build value for its own, customers, stakeholders, and shareholders. Also, ensure that the company remains financially stable and continues to work on solutions and products for their customers.
Types of Start-up
While considering a start-up, you must know which category it fits in. According to Silicon Valley Entrepreneur, Steve Blank, there are six types of start-ups:
- Lifestyle Start-ups (Self-employed folks): A lifestyle entrepreneur is living the life they love, works for no one but themselves while pursuing their passion. Ex: freelancers
- Small Business Start-ups (Feeding the Family): In small business entrepreneurship, the owners want absolute power over their work and ‘Feed the family’. Ex: grocery stores, hairdressers.
- Scalable Start-ups (Born to Be Big): From day one, the founders believe that their vision can bring changes in the advancement. Unlike small business entrepreneurs, their interest is not in earning a living, but rather in creating equity in a company that eventually will become publicly traded or acquired, generating a multi-million-dollar payoff. Ex: Google, Uber.
- Buyable Start-ups (Born to be bought): The start-ups formed to sell later on to a larger enterprise are buyable start-ups. Ex: Web and Mobile App.
- Large Company Start-ups (Innovate or die): Large companies have a finite life duration. Changes in customer preferences, new technologies, legislation issues, new competitors create pressure, forcing large companies to bring about new innovative products for new customers in new markets. Ex: Android
- Social Start-ups (Mission Difference): They are passionate and driven to make an impact. But unlike scalable start-ups, their goal is to work for the betterment of the society, not to take market share or to create wealth for the founders.
Starting a start-up in India
By now, you might be thinking about how to get started. Do you want to be the next Ola, Paytm, Oyo? We have got you covered, to begin with innovating lives.
Implement your Idea
We all know that ‘idea‘ should be unique. The key to a successful start-up is how you implement the idea, test and develop it. Firstly, scale up your product, conduct market research, and test it in the market before considering funding.
Get a Co-Founder
Decide that, do you need a co-founder or not. Ask yourself, “Do you need support?” or “Can you do it alone”. If the answer is no rather than seeking a co-founder or core funding team, remember it is always better to get support and help from like-minded people.
Incorporating your company
Incorporating a company can be a big deal for start-ups as it takes time and has procedures, so I would suggest firstly make a product then register your company.
In India, after the process of incorporation, a company would fit into one of the following categories:
- Private Limited Company
- Public Limited Company
- Unlimited Company
- Limited Liability Partnership (LLP)
- Sole Proprietorship
- Joint Venture Company
If you are successful in exceeding three steps, then you are good to go for funding. Indian start-up scenarios have various kinds of funding; one should research them before seeking one. Earlier the Indian start-ups just had the option of borrowing money from family and friends, a loan from banks, IPOs and borrowing facilities from some other institutes. Now, there are many types of funding one can get from investors.
For a better understanding, we can have a gander of the case study on Paytm.
Paytm is one of the most successful start-ups in India. Founded by Vijay Shekhar Sharma in August 2010, Paytm changed its plan of action to become a commercial centre and a virtual bank model.
History and Origin of Paytm
Vijay Shekhar Sharma thought of something that was an alien concept to most of us back then. When cashless transactions were only a distant idea, Paytm laid its foundation. In the beginning years, they used application mostly to pay bills and recharge mobiles.
After demonetization, Paytm had its big break.
Business Model of Paytm
Paytm paved the way for other digital payment websites that we see today in India. Paytm first catered to the needs of the younger generation and later expanded its focus to include the older population of India.
The company developed from a recharge and bills payment website to a full-fledged online banking service kind of application with loads of services and offers.
Paytm is now an RBI certified secure virtual bank allowing people to complete their needs effortlessly by functioning as an online marketplace. They have an all-time functioning customer service facility. Because of all these factors, one can say that Paytm is one of the most secure online payment portals available.
One of the crucial parts is played by a start-up ecosystem which helps in the progress of the company. The start-up ecosystem comprises the gathering of individuals, new companies, and related associations that function as a framework to make and scale new businesses. Start-up ecosystems are framed regularly in a moderately restricted zone with a focal point of gravity like a college or a concentration of technology companies. This environment draws together key entertainers and partners that float towards development ventures, including new business visionaries, tutors, hatcheries, sources of talent such as universities and corporations.
The start-up ecosystem supports all individual entrepreneurs with capital from speculators and other entities providing funding. The ecosystem also supports failed entrepreneurs.
Indian Start-up Ecosystem
India is becoming the world’s fastest-growing start-up ecosystem housing about 50000+ start-ups. DPITT recognizes about 31945 start-ups under the Start-up India Initiative to date. Bangalore is the home to more than 25% of total start-ups in India.
In around ten years, the Indian start-up ecosystem has scaled to become the third biggest start-up point in the world, followed by the US and China. No doubt the success of consumer internet companies has played and kept on playing a significant job in that.
Coming up with a great startup idea feels like a breakthrough, but it is only the beginning. The next step is looking over your ideology and getting others to buy-in. These supporters are your first real customers. If they are willing to invest in your plan, you’ll be off to a great start. Successful startups are about creating something in the right place at the right time. Tighten your seat belts and have a successful journey.
All the best!