Understand what a startup is and how its basic principles can help companies grow

Surely you’ve heard the term startup out there, but do you know what it means?

Although this term has been around for decades, it was only with the internet boom that it became known around here. 

More recently, with rapid technological advancement , startups have started to become popular. 

It cannot be said that there is a specific concept of what a startup is, but there is some consensus about it. 

In short, a startup can be defined as an emerging company that bets on an idea, usually with a central technological component and high growth potential.

Generally, these companies defend an innovative idea , sometimes considered risky, that stands out in the general market line by having the potential for success . 

Given the growing relevance of this type of emerging company, which spawned some of the titans that dominate the market today, such as Facebook, Amazon or Google, for example , it is not surprising that the startup phenomenon is attracting more and more attention.

It is notable that the term startup, as a concept,  has extended beyond its original meaning , which refers to certain types of companies when they are in their early stages, and is being used to describe a specific management approach.

The number of entrepreneurs willing to take risks and venture out of their comfort zone to try their luck with an innovative business model is growing, since technological advancement is so fast and the possibilities for using emerging technologies are so many.

It is very common the association between startups and incubators or accelerators , companies that are interested in financially supporting projects that have the possibility of rapid development and growth.

Basic principles of a startup 

In his book, The Startup Way  , a continuation of The Lean Startup  , author Eric Ries  identifies 5 basic principles of a startup that can and should be adopted by any company, regardless of its size:

• Continuous Innovation 

The goal is not to make an innovative, risky idea come to fruition.

Continuous innovation is about identifying new methods that will allow the company to grow, as well as constantly generating new ideas.

• The Startup as an Atomic Workforce

The idea is to create work teams within large companies, allowing them to operate as if they were small internal startups, avoiding the typical slowness of established traditional businesses.

• Organizations lack a function dedicated to entrepreneurship

In some companies, as they gain a more comfortable position in the market, the notion of entrepreneurship, as a continual exploration of new business models, falls by the wayside.

These companies tend to focus too much on capitalizing on their tried and trusted profitable business and developing new methods or ideas.

Eric Ries argues that this typical startup role should become a fundamental part of every company, along with marketing and finance.

• the second foundation

The scale of changes needed to take the important steps common to startups is such that it would lead to some sort of “second foundation” of the company.

This would require the company to rewrite its DNA, as it would be defining the entire corporate purpose around innovation, which would likely require restructuring existing working methods.

In other words, breaking with traditional models and trying to replicate the flexibility that startups have when adapting to market demands.

• continuous transformation

This point can be summed up with the expression “and back to the beginning”.

According to Ries, companies need to instill in their corporate DNA the ability to constantly reinvent themselves, so that, once a change or transformation has been achieved, they are ready to take on a new challenge.