Many of the problems that existed in the past have now been resolved. However, this does not mean that new problems will not arise. In the business world, the problem does not end, and neither do those who find solutions to it. At this point, it is inevitable to encounter the term “startup”. Because it is the job of startup companies to produce solutions by meeting current needs. These types of companies are often confused with entrepreneurship or a newly Started company. But there are very serious differences between them. So what exactly is a startup, which companies are called startups?
What is Startup?
Startup; It is a name given to initiatives that use all technological possibilities to produce solutions to problems and respond to needs, and that develop ideas, products, or services with extensive R&D studies. There are suggestions such as “enterprise” and “new venture” in Turkish, but these terms are mostly used in English as they can cause confusion between startup and entrepreneurship. It is thought that the word “startup”, which has been adopted all over the world and has become a universal definition, originated in Silicon Valley, the popular place for entrepreneurs, in the early 2010s.
When we make a literal translation of the word, it means “to begin”. In fact, the term “starting” gives a correct idea for the definition of a startup. Because it is a word used universally for “companies that start from scratch and develop and grow”. Starting from scratch here does not mean capital in the primary sense. Whether a company is a startup or not is not related to its financial strength. These companies start from scratch in terms of the product they will produce or the service they will offer. They develop in a way that focuses on producing a solution to a problem that has not been solved before.
In Which Fields Can a Startup Company Be Started?
Startups are often thought of as tech companies. This is a wrong view and it should be said that it is possible to establish a startup company in almost every field. One of the most important reasons why such startups are perceived as technology companies is that they make significant use of technology. But in today’s world, it is not possible to solve a problem without technology. Therefore, companies try to solve a problem by making use of existing technology, or they find a solution by producing a new technology regardless of the field.
The popularity of startup companies in Turkey in software development has also revealed the misconception that these companies provide services in the software field. But startup companies can be Started for many sectors such as e-commerce, marketing, architecture, fintech (financial technologies), design, and service, apart from technology and software.
What is the Difference Between Other Companies and Startups?
What is a normal company, what is a startup company? Are the two different? Yes, it is different. The most important difference is that startups are Started on a “temporary” basis. Nobody wants to start a temporary company but rather wants their company to serve successfully for years. Startups have a clear main idea. When the problem discussed in short is solved with a product, service, or technology, the startup company is doomed. Because these companies work to find out what needs to be produced rather than producing.
Startup companies can market their solution to other companies. Or they can start production by becoming a normal company. In other words, the temporary preparation stage entered to establish a normal and permanent company is a kind of startup. The reason why it is temporary is the goal of finding a solution to the problem in a certain period of time. If a solution cannot be found within the specified time, the said attempt may be considered unsuccessful and terminated. But when a normal company fails, it can turn to different markets. A large-scale failure results in bankruptcy anyway.
What is the Difference Between Entrepreneurship and Startups?
The inaccuracy of attributing a classical entrepreneurial meaning to the concept of a startup can be understood much more clearly with the differences that entrepreneurship has. One of the most obvious differences is the for-profit situation. Both ideas focus on meeting the needs of the consumer, but entrepreneurship is of course made for profit. In startups, there is no profit in the first place. The focus is on providing maximum benefit and finding a solution that can meet consumer needs. So much so that many startups that focus on solving global problems are funded by foundations and incubators.
Entrepreneurship brings together the problem and the solution. In other words, it presents the solutions found by startups to a consumer group in a certain region. This shows that entrepreneurship has geographical constraints. Even if the entrepreneurial operations that can grow enough have come to an international scale, the startup is more universal in every sense. For example, it is possible to call the company that first developed the idea of waterproof shoes a startup. But opening a shoe store to sell it is defined as entrepreneurship. Startups find the business model and entrepreneurs adapt the model to the sector, region, and the conditions of the day and bring it together with the needy.
What is Entrepreneurship?
There is more than one definition of entrepreneurship. Its basic definition is “the organization that creates new values by bringing together the factors of production and producing economic goods and services”. The point where it is similar to a Startup is that there should be an “innovation” in it. Because it is very difficult to achieve success by replicating an existing venture. Entrepreneurship is actually a way to meet consumer needs through new products, new technologies, and new markets. For this reason, social and psychological risks are taken as well as financial.
How to Start a Startup?
If you want to establish a startup company, it is useful to proceed step by step. These types of companies are called startups because they are open to rapid development. In order to keep up with this rapid development, you should draw your roadmap beforehand. Of course, the most important detail is that you have a future-oriented mindset. Because it is of great importance for success that you produce permanent solutions, not temporary ones. You must have foresight about how the problem you are addressing might evolve in the future. Perhaps you are already seeing a problem that will arise in the future. For example, going to Mars is not a problem today, but SpaceX, which thinks that people will need it in the future, is working in this area.
The vast majority of startups are created based on a person’s idea. So the idea usually comes from one person, but a company is Started to develop and implement it. Making a business plan at this stage is important for the future of the company. If you create your business plan, you can clearly see your advantages and disadvantages and take your steps accordingly. Thanks to the plan, you can establish a team according to the workforce you need, and you can create your financial resources in a way that will not let you down. Some of the details that should be included in the business plan are as follows:
- Company structure
- Purpose of establishment
- Form of management
- The market research
- Competitor analysis
- Team and team management
- Financial planning
- Marketing and sales strategies
- Exit strategy
- General operation
Startups are businesses that are generally started with small capital. But the financial aspect of the business varies according to the scale size. You already know that it is not possible to address universal problems and produce a useful technology with very small capital. The important thing here is to provide financing that can go until the end of the project. Financial inadequacy plays a major role in the failure or failure of a startup venture. Therefore, a strong study on financing is required. You can get support from organizations and incubation centers that support such companies. If you have a sound enough idea, you will not have any trouble finding sponsors.
As in almost every startup, it is important to create a persona in a startup. Because you can’t just develop and reveal an idea and expect the one who needs it to get it. You should also know in advance to who the technology, product, or service you are developing should appeal. Therefore, you should create a persona, that is, create an ideal customer profile. This requires accurate market research and detailed analysis. What needs of people will your production meet, and in what situations? Finding answers to these questions will also help you identify the gap you need to fill in the market.
Prototyping and Controlling
Prototyping allows you to get your idea to a wider audience. If you want to show that your idea is viable, you should submit a prototype. It is also helpful in seeing your shortcomings. Note also that the prototype is called an “early sample” or “early sample”. In other words, this is not your final product, it is the product you represent and produce in its closest form to the final.
You can present the prototype with a classic drawing, digital modeling, or physical production. The important thing is which one conveys your idea better and that you have sufficient control over it. It is also an important detail that the prototype you have prepared is open to development. You need to refresh it until it reaches the best level. It is especially beneficial in terms of finding financing. Therefore, if possible, you should also make different versions.
You need a marketing strategy to provide financing for the establishment of your startup company and then sell the product or service you produce. Products and services gain value as much as they can be marketed. This is one reason why for hundreds of years old brands advertise every day. Marketing power raises the prestige of the relevant product. Since startups are expected to gain an upward value, “up” has been added to the end of the word. Showing that you can gain this value is only possible with the right marketing.
What Do You Need to Know About Startup Law?
If you want to step into this field with an innovative venture, there are also things you need to know about startup law. The management, technological and R&D stages of the business may be more important for you, but if it is not in accordance with the legal procedures, it is not possible to start a startup. More importantly, you must protect the ownership of the idea you have developed by law. If you don’t want to watch someone else implement the idea you have developed, it would be beneficial to be aware of the law.
There are different areas related to startups such as intellectual property law, corporate law, and IT law. In this direction, an unofficial branch of law called “startup law” has emerged. In addition, it is possible to connect the subject to different branches of law depending on the sector and field of the product or service developed.
Protection of Ideas
There are some legal regulations that ensure the protection of the idea you have developed. Original and original ideas are much more advantageous at this stage. You need to get a patent for a product you produce. If you introduce your product to the public, your 1-year patent application period begins. If you do not apply within this period, you will lose your patent right. Another alternative other than the patent is the utility model certificate.
This document, which is given especially for new inventions, is more aimed at protecting inventions that can be adapted to industry. The utility model certificate gives the owner the right to manufacture and market the products that can be considered inventions for 10 years. The idea in question is also preserved for its owner. It is not possible to obtain a patent or utility model certificate for some developed ideas and technologies. In such cases, the creator of the idea becomes the copyright owner.
Contracts Arranged During the Incorporation Process
Startups have the freedom to choose one of the capital companies such as limited and joint-stock companies, or one of the sole proprietorship models such as limited partnership and collective. You can decide on the structure of the company you will establish for your venture. At this stage, it is also useful to compare the advantages and disadvantages. It is often argued that capital companies are more advantageous because they are more prestigious. Considering that startups set out with international goals, it can be concluded that the company structure is also important.
Some contracts that need to be drawn up during the incorporation process are as follows:
- Shareholders Agreement: It is a very important agreement for startups where there is more than one partner and especially for outside investors. The shares between the partners, the transfer of shares, relations, the structure of the board of directors, and the positions of the shareholders are determined by this agreement.
- Letters of Intent: This contract, which was created to determine the general framework of investor negotiations, also forms the basis of the main contract to be prepared in case the meeting is concluded positively. The letter of intent, which formalizes the start of the negotiations, also provides protection in terms of confidentiality.
- Confidentiality Agreement: A new idea or invention forms the basis of startups, and many situations, especially investor meetings, cause these ideas to be transferred to third parties. Thanks to the confidentiality agreement, necessary information can be protected as a trade secret.
Ownership of Rights
You may need to create a brand in order to have rights over your startup company. The brand is the most obvious detail that distinguishes you from other companies. You don’t have to register the brand you created, but if you don’t, it will be difficult to prevent it from being copied. By registering your trademark, you can take ownership of the rights. Ownership of rights is especially important for ideas that do not require patents and require copyright.
Regulations regarding the prohibition of competition are a detail that protects startups significantly. People working in any company can learn the trade secrets of that company closely. Employees who can access a lot of information such as business plans, marketing strategies, and customer data can provide benefits for themselves or third parties. This leads to unfair competition. Therefore, it has become a necessity to include this detail in employment contracts. In line with this contractual obligation, employees cannot compete with the startup company.
What is Startup Exit?
startup exit; is the sale of the developed idea, product, service or technology to another entrepreneur. Exiting is not something the financially challenged owner does to generate financial income. Therefore, if you want to be a startup entrepreneur, you should not hesitate to exit. Because if an attempt exists, it is successful. The important thing is to take this step at the right time. Therefore, it is useful to plan ahead.
The importance of exiting can be clearly understood from successful startup examples. Especially when startups in Turkey exit by being sold to large global companies, they are told as success stories. There are some details that you need to pay attention to in order to exit successfully. The most important of these is to determine the exit strategy during the establishment phase. You may not be considering selling your startup at first, but this is a step you should take. Therefore, while making your business plan, it is useful to be able to foresee who may be interested in your startup during the exit process.
You should make an overall assessment of your company at every level you reach in terms of development and progress. In each evaluation, you can measure the startup’s potential to exit, and if there is something wrong, you can draw new ways to fix it. Another detail you should pay attention to is the documentation process. You must be archiving your company’s documents both in print and digitally. You will need all documents in the exit process, from accounting records to official correspondence, from contracts to tax details. You can also increase the value of your venture with accurate reporting.
You should also have a plan for after exiting. Many startup entrepreneurs continue to work at the company after exiting. Some start a different startup with the money they earn, while others continue their investments by buying a share from the company they exited. Therefore, if you plan the steps you will take at this stage in advance, you can increase the scale of your success even more.
What are the Success Secrets of Startups?
Successful startups have some common characteristics. At the same time, it can be said that there are some details that change in line with the perspective of the field and the entrepreneur. The reason for existence plays a big role in the success of an enterprise. In startups that focus on problem solving, it should be known in advance what benefit will be provided to humanity. Each successful entrepreneur presents you with a different key to success. This is because each of them has their own unique point of view. You must be original first and then take action. To summarize, the 5 secrets of success in startups can be listed as follows:
- Innovation: Your enterprise should have both innovation and creativity. Innovation is an expression that encompasses the realization of new and creative ideas on a marketable scale.
- Consistent Idea: You must make the idea that underpins your startup the identity of your company. Consistency of your idea makes it easier to implement.
- Learning and Growing: Sometimes even very good ideas fail. The reason for this is to be closed to learning and development. It is obvious that successful entrepreneurs learn new information over time and develop in line with this learning.
- Taking Risks: Startups involve more risk than normal companies and classical entrepreneurship. Because it focuses on creating an idea that has not been produced and sold before. So the risk is great, but fearing the greatness of the risk only brings failure.
- Industrial Perspective: All sectors to which the developed idea, product, or technology is directly or indirectly related should be well analyzed. Drawing small boundaries can minimize the potential of the venture and cause it to fail.
Successful Startup Examples
There are startup investors as well as entrepreneurs. Some companies on a global scale buy successful startups so that entrepreneurs exit. But exiting is not the only indicator of success. Many details such as the audience reached, the effect, and functionality can be considered success indicators. It is possible to have a clearer idea about this subject by looking at examples from Turkey and the world.
5 Successful Startups from Turkey
The startup is an understanding that comes to Turkey’s lands much later than the rest of the world. But being late doesn’t mean progress can’t be made. So much so that many projects initiated by Turkish entrepreneurs attract worldwide attention.
- Bring: A real startup, Getir is the first startup to implement its business model. It started its life as a mobile application that delivers the needs of people, in short, markets products to the address in an average of 10 minutes. It took serious investments and opened to the world with a very fast growth rate.
- Obilet: Carrying out the business of buying bus and flight tickets digitally, Obilet also gave users the opportunity to compare prices and companies. Thanks to Obilet, which closed the era of agency travel, users had the opportunity to see all companies on a single screen.
- Insider: In short, the task of creating “usable data”, Insider is a startup that has made a sound in the world. This service, which analyzes the daily behavior of customers with artificial intelligence algorithms, ensures that future sales increase.
- Udemy: Udemy, one of the world’s largest online education platforms, was founded by a Turkish entrepreneur. In this project, which has grown in a short time and inspired many initiatives in the world, it is also possible to earn money by training and to receive training.
- Peak: Peak, especially known for its exit, has turned into one of the biggest companies in the mobile game industry. It was bought by the world giant Zynga.
5 Successful Startups in the World
There are startups around the world that have achieved significant success with the realization of very original ideas. Of course, we can get to know the service providers in Turkey much more closely.
- Airbnb: Airbnb, which provides users with the opportunity to earn money with both affordable accommodation and home-sharing, is used very often, especially in international travels. It makes it possible to rent an apartment or a room in the apartment instead of staying in a hotel.
- Uber: Uber, which we know again from Turkey and whose taste is left on our palate after being banned, offers an alternative to conventional taxis. While vehicle owners can earn money by driving a taxi through Uber, users can get detailed information about the driver and fare.
- Snapchat: Snapchat, which entered our lives in 2011 by offering very new features compared to others, allows sharing photos and videos by adding notes to them. The most important feature is that the shares disappear after a certain period of time.
- SpaceX: Founded by Elon Musk, one of the world’s most popular entrepreneurs, SpaceX is a company that conducts research on space travel and transportation.
- Amazon: Even though it is very old, it is impossible not to include Amazon in this list. Because Amazon is considered one of the companies that invented e-commerce. It is a fact that everyone knows how big Amazon is today, which started out with the idea of selling books on the internet.