Are you interested in learning the 6 most common types of startups and how they scale? Read along with me.
Contrary to common belief, not all startups are tech companies in Silicon Valley (like Facebook or Google). There are numerous startup possibilities, ranging from lifestyle startups to social and environmental impactful organizations. A startup is not a permanent business model, but the critical first stage of a company’s life.
Going further, a startup company’s goal is to create a product that either targets an untapped market or improves on existing options. The first step in launching your startup is to understand the six types of startups and which one is best for your company’s goals:
What are the Different Types of Startups
The Six Types of Startup are as follows:
- Scalable Startups
- Startups of large Corporation
- Small Business startups
- Social Entrepreneurship
- Lifestyle Businesses
- Purchasable Startups
1. Scalable startups
Scalable startups take an idea or concept typically in the tech sector and work to rapidly grow the company’s top-end revenue to achieve the highest possible return on investment (ROI). This type of startup causes extensive market research to identify exploitable market opportunities.
Google and Facebook are two of the most prominent examples of scalable startups. Both of these companies began with the intention of dominating their industries using a scalable startup model and were successful.
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A Scalable Startup Could Be Right for You If:
- Your startup idea has a large market and significant growth potential.
- You’re an entrepreneur eager to shake things up.
- You want to be the industry’s leader.
2. Startups of Large Corporations
Large companies must adapt their business model to survive as technology, customer interest, and markets change daily. This is where large corporation startups come into play.
These offshoot startups, backed by the support and capital of the already successful company, aim to reach new audiences, diversify product offerings, and keep large companies plugged into the ever-changing market.
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A large company startup may be right for you if:
- You Already own a large, successful company.
- You want to diversify or enter a new market that isn’t currently in your company’s wheelhouse.
- You can compete with new businesses while also keeping up with the changing market.
3. Small Business Startups
Small business startups prioritize longevity over scalability. By catering to a small target market, these small startup companies can provide enough capital for financial stability.
Family-owned and operated barbershops, grocery stores, and retail shops are common types of small business startups.
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A small enterprise startup may be right for you If:
- You intend to hire locals and family members to run your business,
- You want to concentrate on contributing to your community.
- Rather than pure profit, your primary goal is to build a long-lasting business.
4. Social Entrepreneurship
Unlike other types of startups, social startups are created to make a positive social or environmental change rather than to make money for the founders.
Social entrepreneurs should not expect a large payout from their startup; however, if it is not a nonprofit organization, it is possible to make money with this startup model.
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A social entrepreneurship startup may be right for you If:
- you want to build a company that has a positive social or environmental impact
- You aren’t looking to start a business for the sake of profit.
- You have a solution to a widespread problem, particularly for underserved communities.
5. Lifestyle Businesses
Lifestyle startups are born out of a founder’s passion and desire for independence, with the founder devoting their time and energy to turning their favourite hobby or activity into a profitable business.
This can range from a frequent traveler starting a tour guide company to a web developer starting a freelance coding business.
A lifestyle enterprise may be right for you If:
- you have a hobby that you could do all day, every day
- You have the self-motivation and discipline to be your own boss.
- You’re enthusiastic and inventive.
6. Purchasable Startups
Unlike other startups, buyable startups are designed to be sold to a larger company for millions of dollars rather than becoming billion-dollar companies. Buyable startups are typically tech-focused, with many in the app development industry.
A buyable startup may be right for you If:
- You want to build a company but don’t want to commit to running it long term
- You have a fantastic startup idea with enormous growth potential
- You call yourself a “serial entrepreneur.”
Definition of a Startup
A startup is not a permanent business model, but rather the critical first stage of a company’s life.
What are the 5 components of a startup?
The 5 components of a startup describe when, why, and how the founder built the startup and what the company is addressing. They include:
- The business name
- The laid down business structure
- Location of the company
- The mission statement of the company
- The competitive advantage of the firm and
- The date they founded the company.
Conclusion
There are more startup types than Silicon Valley tech companies in the startup world, and there is a startup type for every type of entrepreneur and business idea.
Launching a startup is an exciting first step toward your entrepreneurial goals, whether you want to start a charitable organization, diversify your present firm, or start a small business in your neighborhood.
Important Takeaways
The six types of startups are:
- Scalable Startup
- Large corporation Startup
- Small business Startup
- Social entrepreneurship
- Lifestyle businesses
- Purchasable Startup.
