The Start-Up Phenomenon: A Digital Flash in the Pan or Successful Driver of Innovation?
Start-ups are making headlines. Both online and offline, the young, new companies that turn innovative business ideas into reality are being widely discussed. But what exactly is a start-up?
Start-ups are mostly companies in the technology sector since start-ups differ from other newly founded companies in one important respect: “Conventional” new businesses serve existing markets, while start-ups “create” their own market with innovative, disruptive ideas. The goal of start-ups is to grow fast and quickly increase their value. The basis for this is an innovative, unique business idea.
However, there’s a catch that can result in either success or failure: the missing capital base. Because of the high risk (after all, a start-up’s market doesn’t exist yet), start-ups usually use alternative financing sources such as venture capital firms, incubators or business angels. With this outside capital, the start-up finances its research and development activities, can build a scalable business model and grow rapidly within a brief period of time. Often, the goal is to sell the start-up to consolidated businesses after a few years.
Start-ups are sprouting on the outskirts of economic spheres like mushrooms after a warm summer rain. In these areas, which traditional companies avoid because of their lack of financial promise, innovation and groundbreaking ideas make up for the unfavorable conditions. The internet also serves as a playground for start-ups that don’t require retail spaces and are exclusively active online.
So that’s a start-up. Here at etit, we will feature additional blog posts about opportunities, risks and examples. You can also contact us for a personal conversation. We look forward to your start-up ideas and are happy to assist you with their implementation.
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