Startup Terminology - Operations Management for Startups

1. 1
Startups
Terminology
1
1
M. Sedighi
Department of Management, Science
& Technology

2. 2
Definition of Start-up
• There's no definition any two
entrepreneurs or investors agree on.
• Two main features of a startup:
• Scalability
• Growth
• startup company ("startup"): A company,
partnership, or temporary organization
designed to search for a repeatable and
scalable business model.

3. 3
Nature of the Growth
• Demand in your industry is
constantly outstripping the
supply !
• You wish to have growth in
multiples and not in
percentages
• You believe that your service /
product can achieve the
exponential growth and you
have the right strategies in
place!

4. 4
What percentage of inventions
become start-ups?
• Approximately 5-10% of inventions meet
the criteria necessary to become a start-
up company

5. 5
A startup timeline

6. 6
Prototypes
• Hack out a prototype.
• spend 2-10 weeks max
• Investors are much more likely to
fund you if you can show them some
minimal initial version of your idea.

7. 7
Valley of Death

8. 8
Startup incubators
• incubator: Program designed to support
successful development of startups by providing
business resources.
• business, marketing, and networking advice
• computing resources (computers, net access, servers)
• financial advisors
• management teams
• access to loans and banks
• access to angel investors and/or venture capitalists
• legal advisors (such as for intellectual property rights)
• Examples: Ycombinator, Techstars

9. 9
Startups need fund to build prototype
• Reasons that startups might need
money:
• Pay core employees (devs, manager,
designers)
• Purchase equipment (computers, servers,
software, services...)
• Pay for licenses to use intellectual property
• Rent office space
• In the early stage: marketing…

10. 10
Funding timeline

11. 11
Working at startup - pros
• motivation
• work on something you believe in
• autonomy
• smaller team; you get to make decisions
• ownership
• you may be given stock in the company
• compensation (long-term)
• chance to get rich if company becomes a hit
• casual workplace atmosphere

12. 12
Working at startup - cons
• compensation (short-term)
• somewhat lower pay than at big company
• fewer perks
• less free food, games, toys
• job security
• company might fail
• long hours
• entire company's fate rests on short-term
milestones;
may have to work long days and/or
weekends to meet them

13. 13
Startup failure
• Different stages, Different reasons
Source:https://www.forbes.com