Have you ever thought about starting a business like a restaurant or an online store but got discouraged because you have no idea how to start a business?
What if I told you there is a type of business where you COULD EARN SO MUCH more AND GET EXPERT TIPS FROM INDUSTRY MENTORS so you won’t make the wrong business decisions?
Enter, the world of startups. In this article, we will talk about the following topics and how you can benefit from them:
- What startups are
- How startups are different from ordinary businesses
- The startup growth phase and other stages of a startup’s development
- Industry mentorship or guidance through startup incubators
If you’re a business owner or industry leader, check out the last section of this article to see how you can benefit from helping out startup founders in a university-based incubator.
Without further ado, let’s start talking about startups!
What is a Startup?
Forbes magazine defines startups as businesses that develop a UNIQUE product or service and bring it to the market.
UNIQUE here means that startups usually shake up the business world in ways that ordinary businesses don’t. In other words, startups introduce products or services that are ENTIRELY NEW or A MASSIVE IMPROVEMENT upon existing offerings in the market.
Some famous examples of big businesses that began as startups include:
- Airbnb – Thanks to this former startup, you can stay in many beautiful houses for one or more nights instead of just dreaming about these awesome-looking residences.
- Uber – You are no longer limited to buses, taxis, and trains mainly due to this business.
- Netflix – Binge-watching would not have been a word or reality if this former startup had not been founded.
Now that you know what startups are, it’s time to learn how they are different from corporations and small businesses.
Startup vs Ordinary Business
Startups, small businesses, and corporations all START from somewhere.
So let’s discuss what makes startups different from other entrepreneurial activities. Startups are different from ordinary businesses because startups:
- Don’t always begin with a large amount of money, unlike corporations. Many startups start with little to no funding. Google even started in a garage.
- May start with a small investment like small businesses, but will eventually get more cash investments from investors in different stages, usually during the startup growth phase.
- Aim to grow fast and make a large impact on the economy and the world of business, unlike many small to medium-sized businesses.
- Are usually technological or online-based.
As you can see, even if you have little money, you can start a startup if you have a brilliant business idea and the proper guidance from organizations like incubators. More on this later.
Now, it’s time to explore the different phases or stages in the life of a startup. These stages will help you understand why startup founders (which could be you in the future) can get financial help and industry expertise that many ordinary business founders don’t have access to.
The Three Main Stages of a Startup
Startups have three main phases or stages in their growth and development. These are:
- Early stage
- Growth phase
- Late stage
Let’s have a look at each phase one by one.
Startup Early Stage
Startups in the early stage are still in the process of proving to the market that their product or service is worth investing in.
Startups aim to attract investors by designing a working prototype or proposing a new type of service. A prototype is the first version of a working product. Google in its current form may not suffer that much in launching its drone prototype for door-to-door delivery since it’s a giant company with access to the best minds and all the money in the world.
But many startups need guidance and early-stage funding in order to create that prototype or plan well their service concept.
That is why many startup founders in the early stage get help from so-called incubators. We will talk about how you as a business-minded person or organization can benefit from incubators later on.
As early-stage startups learn how to improve their product or service, they may or may not be already selling their offerings to consumers. However, early-stage startups already active on the market usually have few customers.
It is in the startup growth phase, which we will talk about next, where things start to speed up and grow.
Startup Growth Phase
This is where startups start to convince major investors that their business is worth paying for. Startups in the growth stage of their life have convinced investors that their businesses can make money.
That is why many business founders get their first Series A funding round in the startup growth phase. Each round usually lasts 18 to 24 months.
Startups spend the money they receive from investors in the first round to do any combination of the following:
1. Hire more employees
2. Acquire more capital equipment like computers, buildings, office furniture, manufacturing tools, etc.
3. Expand marketing and advertising efforts
Many startups that earn enough revenue after the first Series A funding round could get more funding from investors in succeeding rounds.
As investments come in and sales grow, startups eventually reach the so-called late stage.
Startup Late Stage
Basically, startups in the late stage have already acquired a stable source of funding from investors.
Many investors are confident in late-stage startups because these businesses already have their sales and production team in place and have already firmly established themselves in the industry.
In other words, a startup in the late stage is up and running and has little to no operational or revenue problems.
In fact, some startups in this stage are so stable, they can actually think of expanding to other locations or acquiring more equipment and human resources to increase their output.
Are you convinced yet that establishing a startup is better than starting a typical business? Funding for startups, as you’ve read in the article, is plenty and more flexible than what’s available to ordinary businesses.
But in case you still think startups are only for highly-intelligent and well-connected people, perhaps you should reconsider and read on.
Startup incubators are out there to help in case you feel you’re too small or too much of an outsider in the world of startups. Let’s discover how these incubators can help you build your startup.
Easily Reach the Startup Growth Phase through Incubators like CBI
Before companies reached the exciting and profitable world of the startup growth phase, they all had to start at the usually difficult early stage. However, if you found the right incubator, your startup business would have a smoother transition from the early stage to the growth phase.
As we mentioned before, incubators help provide startup founders with mentorship or guidance from industry experts. We at the Center for Business and Innovation (CBI) at the University of Batangas – Lipa campus have the facilities and experts to help turn your entrepreneurial idea into a real and working business.
Now if you’re a college student, even a non-business major, who wants to create the next big smartphone app or has a new service concept that no one has done before, we at CBI can help you turn your idea into something that can help you earn more money while helping your favorite members of the community.
CBI also welcomes experienced academics, company CEOs, small-to-medium business owners, and technologists who can guide and help launch the next generation of startup founders into the competitive world of business. Talk to us to see how we can reward you for your time and expertise.
Contact CBI at +63 43 723 – 1446 local 830 or send an email to cbi@ub.edu.ph if you would like to know more about the exciting world of startups and how you can get the most out of this new way of doing business.
You can also check out our website at www.ubcbi.com.
Final Thoughts: Can I grow my skills and my business towards the startup growth phase?
Now that we’ve discussed how you can benefit from the different phases of a startup’s life, including the startup growth phase, and the difference between average businesses and startups, it’s up to you to decide whether establishing a startup matches your career, business, and life priorities.
Whatever your decision, always remember that establishing a startup is not as hard as it looks. If you ask for help from incubators like CBI, your startup may enjoy smoother growth from the early stage to the startup growth phase. Remember, you are not alone in facing the new face of doing business, the creative and fast-paced world of startups.
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