So, what is a startup? This is a term that is used so often but not many people have a clear understanding of what it means. A startup is a young company that has been developed by a passionate founder for the purposes of developing unique products and/or services that cannot be resisted or replaced by customers. These companies are usually rooted in innovations that address deficiencies in existing commodities. Dike Ajiri has worked with so many startups in different capacities and is well vast with this topic. He has even coached founders of startups to make their ventures more viable. Startups are rooted in innovation so much that they become disruptors in whatever industries they exist.
How does a startup work?
On the highest level, startups are just like any company, at least in the way they operate. They are simply composed of a group of employees who work on commodities that they will eventually present to customers to buy. The main difference between a startup and any other company is the way it operates. Normal companies simply duplicate what has been done before while startups invent new ways of doing things.
Startups also differ from normal companies in that they grow at an astronomical speed. They heavily rely on iteration to continuously improve on the products/services they present their customers. They rely a lot on customer feedback and usage data to improve on their commodities.
How are startups funded?
Startups go through several stages of funding until they become profitable and self-sustaining. The first funding comes from family, friends, and the founders of the entity in a process called bootstrapping. Next comes seed funding which is money that comes from high-net-worth individuals who act as angel investors and invest in startup companies that are still at the early stages of their development. Next are a series of findings that run from A through D or more. Lastly, the company goes public to raise money in its initial public offering, IPO.
