Startup companies these days are growing at a much faster rate as compared to the traditional big business groups and are giving a tough competition to them. Startups are moving rapidly on the path of growth and now they share reasonable stake in various business domains. E-commerce startups like Flipkart and Snapdeal have established themselves as big brands now and are giving a tough competition to the big brands like Amazon and eBay.
So, what are the reasons behind the rise of these companies? What makes them big? What are the key factors that drive them? These questions must be creeping in the minds of the think tanks of traditional brands, business experts and analysts.
Before answering these questions, firstly, we need to know the difficulties that a startup encounters in its initial phases. When new entrepreneurs start any business, they generally face problems like;
So, what are the reasons behind the rise of these companies? What makes them big? What are the key factors that drive them? These questions must be creeping in the minds of the think tanks of traditional brands, business experts and analysts.
Before answering these questions, firstly, we need to know the difficulties that a startup encounters in its initial phases. When new entrepreneurs start any business, they generally face problems like;
- ·They have limited resources as compared to traditional ones
- ·They lack the reputation and trust that a big company enjoys
- ·They have a small picture of the targets and
- ·They have concerns over cash flow
- But, they also have many benefits besides these problems like
Agility:
- Startups can reform from the basic level and can also change their policies and strategies according to the situations while established organizations will take more time comparatively to transform or amend their work culture and business policies. To do so, they have to think twice, do extensive planning, as they need to ensure everyone from employees to customers and from investors to key officials are happy with the changes.
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Competitive Pricing:
- Small companies or startups provide products at a competitive price as they have to establish their business.
- Bureaucracy:
- Startups are less bureaucratic because of less number of employees, so decision making and policy implementation is much faster and easier in them while in traditional organizations, it takes time and need multiple approvals to bring in any change to the existing business strategies
- ·
Interaction:
- There is greater interaction between the clients and the senior management in startups which is not usually seen in traditional organizations. Similarly, it is easy for any startups to maintain an open and transparent communication system between its senior management and employees.
- These are various other factors as well that help startups establish their businesses, and one common factor in most of the startups is that they are mostly established by young entrepreneurs. They may lack in experience, but they are driven by innovative ideas, hard work, and a zeal to achieve their goals. Even the traditional companies were startups once. The young minds and the companies they have established have changed the environment for business, the mindset of executives, and people in general.
- Entrepreneurs like ‘Sir Richard Branson’ founder of the ‘Virgin Group’ started his first venture at the age of sixteen and it was a magazine called ‘Student’. At the age of 20, he established a mail-order record business and the age of 30 he formed ‘Virgin Atlantic’. Other notable persons like Michael Dell, Sean Parker, Dov Charney, to name a few, too had started their companies at a young age. They all were college dropouts, but they had the vision to establish themselves, to go ahead in life, and to do extraordinary things. These youngsters started from scratch and now they own companies worth several billion. They became what they are now because
