Ps3 Startup Old
Zareen Zapata
The first step in starting a startup is having a great idea. From there, market research is the next step to determine how feasible the idea is and what the current marketplace looks like for your idea. After the market research, creating a business plan that outlines your company structure, goals, mission, values, and objectives, is the next step.
One of the most important steps is obtaining funding. This can come from savings, friends, family, investors, or a loan. After raising funding, make sure you've done all the correct legal and paperwork. This means registering your business and obtaining any required licenses or permits. After this, establish a business location. From there, create an advertising plan to attract customers, establish a customer base, and adapt as your business grows.
A startup can obtain a loan from a bank, certain organizations, or friends and family. One of the best and first options should be working with the U.S. Small Business Administration, which provides microloans to small businesses. The average SBA loan is $13,000 and the max loan amount is $50,000. These loans are usually from nonprofit community lenders and can be easier to obtain than traditional loans from banks.
The benefits of working at a startup include greater opportunities to learn, increased responsibility, flexible work hours, a relaxed work environment, increased employee interaction, good workplace benefits, and innovation.
Valuing a startup can be difficult as startups don't usually have longevity in which to determine their success. Startups also don't generate profits or even revenue for a few years after starting. As such, using the traditional financial statement metrics for valuations doesn't apply. Some of the best ways to value a startup include the cost to duplicate, market multiples, discounted cash flow, and valuation by stage.
A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model.[1][2] While entrepreneurship includes all new businesses including self-employment and businesses that do not intend to go public, startups are new businesses that intend to grow large beyond the solo-founder.[3] During the beginning, startups face high uncertainty[4] and have high rates of failure, but a minority of them do go on to become successful and influential.[5]
Startups typically begin by a founder (solo-founder) or co-founders who have a way to solve a problem. The founder of a startup will do the market validation by problem interview, solution interview, and building a minimum viable product (MVP), i.e. a prototype, to develop and validate their business models. The startup process can take a long period of time; hence, sustaining effort is required. Over the long term, sustaining effort is especially challenging because of the high failure rates and uncertain outcomes.[6] Having a business plan in place outlines what to do and how to plan and achieve an idea in the future. Typically, these plans outline the first three to five years of your business strategy.[7]
Models behind startups presenting as ventures are usually associated with design science. Design science uses design principles considered to be a coherent set of normative ideas and propositions to design and construct the company's backbone.[8] For example, one of the initial design principles is affordable loss.[9]
Entrepreneurs often become overconfident about their startups and their influence on an outcome (case of the illusion of control). Below are some of the most critical decision biases of entrepreneurs to start up a new business.[10]
Startups use several action principles to generate evidence as quickly as possible to reduce the downside effect of decision biases such as an escalation of commitment, overconfidence, and the illusion of control.
Many entrepreneurs seek feedback from mentors in creating their startups. Mentors guide founders and impart entrepreneurial skills and may increase the self-efficacy of nascent entrepreneurs.[11] Mentoring offers direction for entrepreneurs to enhance their knowledge of how to sustain their assets relating to their status and identity and strengthen their real-time skills.[12]
A key principle of startup is to validate the market need before providing a customer-centric product or service to avoid business ideas with weak demand.[14] Market validation can be done in a number of ways, including surveys, cold calling, email responses, word of mouth or through sample research.[15]
Design thinking is used to understand the customers' need in an engaged manner. Design thinking and customer development can be biased because they do not remove the risk of bias because the same biases manifest in the sources of information, the type of information sought, and the interpretation of that information.[16] Encouraging people to consider the opposite of whatever decision they are about to make tends to reduce biases such as overconfidence, the hindsight bias, and anchoring.[17][18]
In startups, many decisions are made under uncertainty,[4] and hence a key principle for startups is to be agile and flexible. Founders can embed options to design startups in flexible manners, so that the startups can change easily in future.
Uncertainty can vary within-person (I feel more uncertain this year than last year) and between-person (he feels more uncertain than she does). A study found that when entrepreneurs feel more uncertain, they identify more opportunities (within-person difference), but entrepreneurs who perceive more uncertainties than others do not identify more opportunities than others do (no between-person difference).[4]
Startups may form partnerships with other firms to enable their business model to operate.[19] To become attractive to other businesses, startups need to align their internal features, such as management style and products with the market situation. In their 2013 study, Kask and Linton develop two ideal profiles, or also known as configurations or archetypes, for startups that are commercializing inventions. The inheritor profile calls for a management style that is not too entrepreneurial (more conservative) and the startup should have an incremental invention (building on a previous standard). This profile is set out to be more successful (in finding a business partner) in a market with a dominant design (a clear standard is applied in this market). In contrast to this, profile is the originator which has a management style that is highly entrepreneurial and in which a radical invention or a disruptive innovation (totally new standard) is being developed. This profile is set out to be more successful (in finding a business partner) in a market that does not have a dominant design (established standard). New startups should align themselves to one of the profiles when commercializing an invention to be able to find and be attractive to a business partner. By finding a business partner, a startup has greater chances of success.[20]
Startups usually need many different partners to realize their business idea. The commercialization process is often a bumpy road with iterations and new insights during the process. Hasche and Linton[21] argue that startups can learn from their relationships with other firms, and even if the relationship ends, the startup will have gained valuable knowledge about how it should move on going forward. When a relationship is failing for a startup it needs to make changes. Three types of changes can be identified according to Hasche and Linton:[21]
Startups need to learn at a huge speed before running out of resources. Proactive actions (experimentation, searching, etc.) enhance a founder's learning to start a company.[22] To learn effectively, founders often formulate falsifiable hypotheses, build a minimum viable product (MVP), and conduct A/B testing.
With the key learnings from market validation, design thinking, and lean startup, founders can design a business model. However it's important not to dive into business models too early before there is sufficient learning on market validation. Paul Graham said: "What I tell founders is not to sweat the business model too much at first. The most important task at first is to build something people want. If you don't do that, it won't matter how clever your business model is."[23]
Founders or co-founders are people involved in the initial launch of startup companies. Three people are mainly required as co-founders to create a powerful team: the product person (e.g. an engineer), a marketing person (for market research, customer interaction, vision) and a finance or operation's person (to handle operations or raise funds).
The founder that is responsible for the overall strategy of the startup plays the role of founder-CEOs, much like CEOs in established firms. Startup studios provide an opportunity for founders and team members to grow along with the business they help to build. In order to create forward momentum, founders must ensure that they provide opportunities for their team members to grow and evolve within the company.[24]
The language of securities regulation in the United States considers co-founders to be promoters under Regulation D. The U.S. Securities and Exchange Commission definition of promoter includes: (i) Any person who, acting alone or in conjunction with one or more other persons, directly or indirectly takes initiative in founding and organizing the business or enterprise of an issuer;[25] However, not every promoter is a co-founder. In fact, there is no formal, legal definition of what makes somebody a co-founder.[26][27][28] The right to call oneself a co-founder can be established through an agreement with one's fellow co-founders or with permission of the board of directors, investors, or shareholders of a startup company. When there is no definitive agreement (like shareholders' agreement), disputes about who the co-founders are, can arise.
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