A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. Startups typically begin by a founder solo-founder or co-founders who have a way to solve a problem.
The founder of a startup will do the market validation by problem interview, solution interview, and building a minimum viable product MVPi. The startup process can take a long period of time, and hence sustaining effort is required.
Over the long term, sustaining effort is especially challenging because of the high failure rates and uncertain outcomes. Typically, these plans outline the first three to five years of your business strategy. Models behind startups presenting as ventures are usually associated with design science.
Design science uses design principles considered to be a coherent set of normative ideas and propositions to design and construct the company's backbone. Because of the lack of information, high uncertainty, and the need to make decisions quickly, founders usually use many heuristics and exhibit biases in their leadership decisions.
Entrepreneurs often become overconfident about their startups and their influence on an outcome case of the illusion of control. Below are some of the most critical decision biases of entrepreneurs to start up a new business. Startups use several action principles to generate evidence as quickly as possible to reduce the downside effect of decision biases such as an escalation of commitment, overconfidence, and the illusion of control.
Many entrepreneurs seek feedback from mentors in creating their startups. Mentors guide founders and impart entrepreneurial skills and may increase the self-efficacy of nascent entrepreneurs. Lean startup is a clear set of principles to create and design startups under limited resources and tremendous uncertainty to build their ventures more flexibly and at a lower cost.
It is based on the idea that entrepreneurs can make their implicit assumptions about how their venture works explicit and empirically testing it. Hence, lean startup is a set of principles for entrepreneurial learning and business model design.
More precisely, it is a set of design principles aimed for iteratively experiential learning under uncertainty in an engaged empirical manner. Typically, a lean startup focuses on a few lean principles:. A key principle of startup is to validate the market need before providing a customer-centric product or service to avoid business ideas with weak demand.
Design thinking is used to understand the customers' need in an engaged start up betyder. Design thinking and customer development can be biased because they do not remove the risk of bias because the same biases will manifest themselves in the sources of information, the type of information sought, and the interpretation of that information.
In startups, many decisions are made under uncertainty, [4] and hence a key principle for startups is to be agile and flexible. Founders can embed options to design startups in flexible manners, so that the startups can change easily in future. Uncertainty can vary within-person I feel more uncertain this year than last year and between-person he feels more uncertain than she does.
A study found that when entrepreneurs feel more uncertain, they identify more opportunities within-person differencebut entrepreneurs who perceive more uncertainties than others do not identify more opportunities than others do no between-person difference.
Startups may form partnerships with other firms to enable their business model to operate. In their study, Kask and Linton develop two ideal profiles, or also known as configurations or archetypes, for startups that are commercializing inventions.