We have heard about and read about many start-ups, which offer innovative services, with great support in new technologies, and based on a scalable business model.
Names such as Space X, Epic games, Trivago or Canva sound; and in the case of Latam: Kavak, Open English, and Jüsto, among others. But what is the secret of successful startups? Why do some succeed faster than others? Let’s delve into this fascinating world, to unravel this enigma.
What are startups?
Word startup is a neologism, composed of the voices start (initiate or begin) and up (an adverb denoting upward movement). It could be translated as breaking in or starting high, alluding both to the recent creation of the model and to the fact of having a strong impact on the market.
Now, these types of companies are usually linked, on the one hand, with the service sector, and on the other with ICT. However, it should be clarified that the latter is not something exclusive or restrictive.
What is clear is that startups are born or emerge in response to a market opportunity, developing innovative products or services. Also, although they have modest beginnings (the partners may be people close to the entrepreneur), they usually experience rapid and strong growth.
On the other hand, these types of organizations are characterized by an open structure, which provides them with great versatility to adapt to changes. In addition, they constitute a scalable business model, with the ability to increase income, with minimal investment.
The most successful startups
Google, Facebook, even Microsoft, and most recently Spotify, are companies that had modest beginnings. They started as startups and became superstars, extremely successful, with a capital that perhaps their founders themselves did not imagine they would have.
In business slang, unicorns are startups valued at $1 billion or more. But, currently, there are some that far exceed those figures. According to the page marketing4ecommerce.net, this was the top ten startups at the end of 2022:
|1||ByteDance||140,000 million USD||China|
|2||SpaceX||127,000 million USD||USA|
|3||Shein||100,000 million USD||China|
|4||Stripe||95,000 million USD||USA|
|5||Canva||40,000 million USD||Australia|
|6||Checkout.com||40,000 million USD||United Kingdom|
|7||Instacart||39,000 million USD||USA|
|8||Databricks||38,000 million USD||USA|
|9||Revolut||33,000 million USD||United Kingdom|
|10||Epic Games||31,500 million USD||USA|
In the case of Latam, in the top ten are Kavak (8700 million USD), Rappi (5250 million USD), Quinto Andar (5100 million USD), C6Bank (5050 million USD), Creditas (4800 million USD), Tiendanube (3100 million USD), Wild Life (3000 million USD), Loft (2900 million USD), Unico (2600 million USD) and Ualá (2450 million USD )
It is interesting to note that of the successful Latin startups, there are seven from Brazil (those placed from the third to the ninth place), although the largest is from Mexico. The rest are from Colombia and Argentina. As for the area, it is varied, since there are fintech, AI, gaming, logistics and e-commerce.
What is the secret of successful startups?
Although each one offers a service or a product that is novel, all these organizations have some elements in common. Let’s find out what is the secret, or the secrets, behind the most successful startups.
A unique idea
Most of the startups propose a novel solution to a problem, it may even be something that no one had noticed before. Sometimes it can be a problem that the same person has suffered in the flesh, as happened with Iker Marcaide, founder of Flywire.
Inspiration and determination
The really important thing is that someone believed in the idea, had the vision that it would be successful and found a way to convince others (partners or investors). Behind many innovative companies is the charisma and conviction of a person, who believed in what he was doing: Steve Jobs, Mark Zuckerberg, David Rockefeller, Ray Kroc.
Without fear of anything
A conservative idea can be sustainable because it goes the safe way. Perhaps it allows it to subsist, but without growing too much; and if it grows, it does so in a slow way. A startup is like a vehicle that goes from zero to a hundred kilometers per hour in fractions of a second.
Only an innovative idea can give this and it only works if there is a willingness to venture, without fear of anything. Twenty years ago, perhaps a page for comparing hotel room prices would have seemed silly to many people. But today Trivago is a company that reports revenues above 350 million USD.
We have already mentioned that a characteristic of startups is that they are scalable businesses. This allows them to expand, hire more staff, and open up to other markets, without too much investment, and with good profitability.
Of course, this great advantage is due to the fact that they are service companies. The same could not be done with industries, where it is necessary to have space for machinery and equipment, larger premises, and warehouses for raw materials and processed products, among others.
Strong support in technology
While this is common in all startups, the most successful ones invest in software developments that allow them to increase the workload or increase the service, if there is a significant increase in customers, without becoming saturated, raising costs, or losing effectiveness.
They show what they are
Nowadays, it is difficult for a company to stand out if it does not do smart marketing. Above all, this means that they know themselves well and know how to showcase their greatest strengths or qualities, which makes them stand out from the competition.
Successful startups don’t always stay the same. Although they keep the central idea, they constantly innovate, adapting and responding to the needs they observe, looking for improvement strategies, becoming more and more efficient, and even incorporating new services.
Listen and see
The above is a product of something fundamental: they know how to listen to what customers demand (hence the importance of maintaining constant communication with them), and analyze the information generated from their processes; therefore, they identify opportunities and take advantage of them.
Correct what is necessary
When analyzing the information, it may be found that there is a need to make changes or adjustments, discarding what is not right or does not generate profitability. This is a fundamental characteristic of successful startups: the ability to make changes on the fly, without stopping. If you are not focused on improving, the business can start, and maybe it will take some steps with strength, but it could slow down its march soon.
Our daily startups
Every day a new startup is born that aspires to become the next star of the business universe. Some will go far. Others maybe not so much. If you are thinking of venturing down this path, remember that the more innovative, the greater the possible profits, but the risks also increase.
However, just because it doesn’t work the first time, doesn’t mean it won’t work. Maybe it needs some improvements. Remember that Thomas Alva Edison made a thousand attempts to achieve the light bulb.