Entrepreneurship concepts to Create a Startup
Trade and business are no longer confined to traditional big companies as in the past, but the competition circuit has become open to entry to small startups and entrepreneurship companies and emerging new technologies. All of this makes it incomprehensible to some of the peoples and makes us get lost in many terms. Therefore, we will talk about some of the most important terms in the world of startups and entrepreneurship.Table Of Contents
- 1. what are Startups and how do they differ from traditional companies?
- 2. What are Venture Capitalists and Angel Investor?
- 3. What is the difference between Accelerators and Incubators?
- 4. What is meant by the term "entrepreneurship"?
- 5. What is the lean startup model?
- 6. What is agile development? What do scrum and sprint mean?
- 7. What is bootstrapping?
- 8. What is a minimum viable product?
- 9. What is meant by the term "proof of concept"
- 10. What is scalability?
First, what are Startups and how do they differ from traditional companies?
In fact, there are many differences between startups and traditional companies, but the problem lies in the definition of startups, which is constantly changing and varies from person to person. But we can define a fundamental difference between startups and others, which is their "ability to grow rapidly". Startups are companies designed to grow very quickly.As for the traditional definition of a startup, it is that company that needs some form of external capital, whether this capital comes through Venture Capitalists or Angel Investors, and we will detail these terms below. The capital obtained by the startup is used to finance the company's operations, growth and rapid expansion.
Also, startups usually try to "annoy" the industry in the market by entering the market and changing its concept and composition (as did Uber, which has troubled the traditional taxi market and transportation industry), but this does not apply to all startups.
What are Venture Capitalists and Angel Investor?
Angel Investor:
Angel Investor, according to Chan, is an individual who invests in a startup and provides financial support to help her carry out her operations. Conversely, the angel investor gets a stake from the startup, as is the case for venture capital firms. However, the angel investor uses his own money to invest in the startup, and usually, the angel investor is an "entrepreneur" who managed to raise a lot of money and began using it to fund other startups.
Venture Capitalists:
Mr. Chan defines venture capital firms as "a type of equity investment company, which has a lot of capital to invest money and time in financially supporting startups. It usually owns a group of different startups that believe they have the highest growth potential." He adds: "Usually VCs provide the capital in return for a share of the startup, and startups constantly try to network with or draw the attention of VCs to obtain financing for their business."
What is the difference between Accelerators and Incubators?
In his article, Mr. Chan explains to us the difference between the terms startup accelerators and incubators and indicates that they usually do the same things in the context of providing advice and opportunities to startups, but they differ from each other in other aspects. In general, both accelerators and incubators help startups grow their business and attract the best venture capital firms to fund them.
Startups Accelerators primarily aim to accelerate the growth of an existing company, usually by implementing an acceleration program within a specific time frame that lasts from weeks to months. In this context, the startup gets the opportunity to work with a large network of consultants, professionals, and entrepreneurs. Accelerators provide the startup with small capital, in exchange for a small stake in the company.
Incubators, in contrast, are more focused on "embracing" startup ideas, and their ultimate goal is to build a viable business model. The article writer says that incubators usually focus more on helping startups in their early stages, and do not have a program to develop startups, and incubators are usually sponsored by companies, governments, or venture capital companies, and they often collaborate with the startup within a common workspace Through an office or a shared work environment, startups are required to move to work in the new environment that the incubators provide during the incubation period.
What is meant by the term "entrepreneurship"?
individuals who work within a firm - not a startup - and lead the innovation and creativity within that company. The importance of entrepreneurs comes from the fact that startups, as mentioned, seek to annoy large companies by changing the fabric of the market, such as changing consumer habits or replacing large companies that dominated the market. Because of this inconvenience caused by startups, large companies have resorted to entrepreneurship to maintain competition and market control by pursuing creative products and services.
Usually, entrepreneurs are given great freedom to experiment and develop their creativity within the company, with the aim of radically changing the way the company provides its services or designing its products and re-moving the company wheel in a new way to maintain its position and control of the market.
Thus we have quickly learned the difference between startups and traditional companies, in addition to some of the most important terms in the world of startups, such as venture capital companies and the angel investor, as well as the difference between startups accelerators and incubators, and finally "entrepreneurship" and its necessity for large and controlling companies On the job market.
Usually, entrepreneurs are given great freedom to experiment and develop their creativity within the company, with the aim of radically changing the way the company provides its services or designing its products and re-moving the company wheel in a new way to maintain its position and control of the market.
Thus we have quickly learned the difference between startups and traditional companies, in addition to some of the most important terms in the world of startups, such as venture capital companies and the angel investor, as well as the difference between startups accelerators and incubators, and finally "entrepreneurship" and its necessity for large and controlling companies On the job market.
What is the lean startup model?
According to Mr. Chan, a lean startup is a business development model that places importance on the company’s ability to quickly adjust itself with minimal resource loss. Its aim is to utilize a stable administrative structure and resources in a flexible manner so that the work proceeds efficiently.
This method means that the startup's development cycle becomes shorter and more dependent on iteration through three phases: construction, measurement, and learning.
The idea of a lean startup’s approach is to invest time to build products or services that meet the demands of old consumers by repetition, and this reduces the need for a large amount of initial financing and the large costs of testing and putting the product to market.
Chan gives us an example of a lean startup via a technology startup that quickly builds a prototype (construction phase) and then puts it on the market and measures product success by analyzing data (the measurement phase) so that data is then used in product development (the learning phase).
To get a deeper understanding of the term startup, Read Eric Ries book The lean startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
What is agile development? What do scrum and sprint mean?
The agile development philosophy is especially concerned with software development. It is a methodology that focuses on developing software incrementally or cumulatively, by enabling startups to work cooperatively, in addition to the continuous testing of the product in a flexible manner that is compatible with changes in the market or technology.
One of the most well-known patterns of agile development among startups is the scrum method, a term borrowed from the violent tactic used by players in rugby as attackers in each team clash and shoulders with the opponents of the other team. Although this term was initially used for software development projects, it has expanded to include other complex projects and product development courses.
The scrum business model begins with a "product owner" that identifies the benefits required for its product and unfinished business in what is called a "product backlog". For example, if the product is to provide a private tutoring service by relying on the Internet, then one of the advantages required to implement the project will be an electronic application that provides services for the consumer 24/24 hours. Generally, the product owner determines the benefits required for his product or project according to the needs of consumers, the team, stakeholders and the executive team.
Also, Chan explains the idea of Sprint, a term meaning fast short race, as a technique that aims to make tracking the achievement of product advantages and goals much easier, as the various benefits of the product are implemented step-by-step through what is called Sprint planning. According to this method, the advantages which should be implemented are chosen, and then also divided into smaller tasks and distributed to the team, so that the team cooperates and meets to implement these tasks as if they are in a short sprint within a specific time frame which makes it easier to follow up and execute the mission more efficiently.
During the Sprint work period, the team meets on a daily basis to consider the progress of the product implementation process and to discuss how to plan the implementation of the small tasks, The scrum master will assist the team in focusing on the performance of the tasks assigned to them and assessing the team's efforts and workflow direction. And after the completion of the work comes another step, which is sprint review or review of the work and knowing the things that went well and what needs to be modified or improved. And then the next feature that must be implemented in the unfinished business list is the product backlog and the same process is repeated in the same manner, until the full product features are completed. Thus, all the product benefits are implemented collectively and cooperatively, step by step.
During the Sprint work period, the team meets on a daily basis to consider the progress of the product implementation process and to discuss how to plan the implementation of the small tasks, The scrum master will assist the team in focusing on the performance of the tasks assigned to them and assessing the team's efforts and workflow direction. And after the completion of the work comes another step, which is sprint review or review of the work and knowing the things that went well and what needs to be modified or improved. And then the next feature that must be implemented in the unfinished business list is the product backlog and the same process is repeated in the same manner, until the full product features are completed. Thus, all the product benefits are implemented collectively and cooperatively, step by step.
What is bootstrapping
It is a process in which the entrepreneur launches a company using very little capital or without external capital and financial support, as he usually builds his company using his own financing or through some simple financial support provided by friends and family. One of the advantages of this method is that it allows the team or the entrepreneur to control all of its decisions, but it carries great financial risks because there is no significant external financial support source.
What is a minimum viable product
A “minimum viable product,” MVP, is a product that, in its early stages of development, has sufficient advantages to satisfy early customers, compare data, and get the necessary feedback for future development. According to Mr. Chan, a minimum viable product is considered desirable among startups, since collecting data through it is less expensive compared to developing a full product that includes other benefits. A full product means increased costs and puts the startup in great
danger of failure if the product is not well studied in advance. Thus, a minimum viable product carries less risk, saves costs and allows to make effective use of time.
What is meant by the term "proof of concept"
Mr. Chan explains the term "Proof of Concept" as follows: "It is a presentation of a product in a way that demonstrates that the concept, outlook or product possesses the potential to succeed in the market or the real world." Thus, the startup creates a prototype that tests the economic viability of the product and establishes practical or potential benefits for it, which is necessary to convince investors, venture capital firms, and other potential stakeholders.
What is scalability?
"Scalability" means the ability of a company or product to perform well when increasing the burden and expanding the work, so that this product can increase its performance and effectiveness in the face of increasing operational requirements. One example is that a technology startup is "expandable" if it is able to serve an increasing number of consumers and work well despite its increasing popularity and growth. Generally speaking, a company is a good possibility to expand if it is able to grow and serve the growing requirements of the labor market.
Thus we have provided a quick review of some of the most important terms and concepts in the startup and entrepreneurial market, such as the lean startup, agile development, scrum and sprint models in business development, bootstrapping terms, the MVP minimum product, proof of concept POC and scalability, which makes the reader familiar with some key aspects of this field.
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