To many, a startup is just a new small business. While a small business may be content to remain small, however, a starup intends to grow into a large company. Startup founders are driven to create something that impacts their industry or market in a significant way. A starup is searching for a disruptive business model that repeatably and scalably achieves product-market fit. A key work is "searching"; a starup's model is unproven and its market uncertain. Because their offerings are speculative, starups have a high failure rate.
A founder envisions something great but lacking in the world and then takes the crucial next step of creating an organization to make it a reality. A founder often starts a company in order to manifest his or her idea, initially assuming all risk and reward. When several people unite to start a company, they are know as co-founder. Between co-founders there is a sharing of ownership, the percentages determined by mutual agreement. While the occasional starup is launched by several more-or-less equal co-founders, more commonly there is a key, initiating founder, with the remainder of founding team referred to as co-founders.
In the world of starup financing, there is a gap between friends and family and venture capital. Here lies the angel investor. While venture capital investments are typically nothing less than $1 million, a typical angel investment can range from a few thousand dollars to the low millions. Angel investors may take convertible notes or participate in a seed round, among themselves or alongside a VC.
"A venture capitalist is a professional who invests third-party funds in early-stage companies. This contrasts with an angel investor, who typically invests their own funds. Venture capitalists invest capital in these companies in exchange for an ownership position in the firm and its potential financial gains. The venture capitalist is primarily using monies from its accredited or institutional investor clients, which it amasses into a pool of capital called a fund, typically structured as a limited partnership. These investor clients are thus known as limited partners and, in this context, the VC as the general partners. A single fund may invest in as many as 20-40 startups. The limited partners share is the gains and losses. Limited partners generally promise their capital for only a limited amount of time, such as 10 years. The general partner is entitled to a fixed percentage of profits, which they can take as exits close. But if the profit level is not maintained through future exits, the limited partners are entitled to claw back enough early profits to bring the general partners into compliance.
The venture capitalist might work independently or as a partner in a venture capital firm, for short a VC firm or just VC. Money raised from a VC firm is referred to as venture capital. Only a general partner has decision-making authority; entrepreneurs are initially more likely to interact with a VC firm's associated. Some VC firms use contracted scouts, often founders of former portfolio companies, who are compensated with a stake in the investment bankers. Now people go into VC firms straight out of school. Also, some serial entrepreneurs have emerged as venture capitalists, leveraging their hands-on, operational experiences."
"The dream of every Silicon Valley startup is to disrupt an industry-to produce an innovation so different firm what came before that it is a game-changer that upends the status quo and becomes the next big thing. Such innovations create disruption as those relying on traditional business models are left at a competitive disadvantage. The idea of " disrupting the X industry""is also often expressed in shorthand as""Disrupt X."" disruption often involves seeing what others don't; sometimes it involves seeing the world in a whole new way. That is referred to as a paradigm shift. Althought startups should think big, they should focus on a well-defined and achievable vision, rather than try to boil the ocean.
When expressing a desire to engage in disruptive innovation, the phase BREAK SHIT may also be used. This is the opposite of "if it ain't broke, don't fix it" and reflects a desire to upend established ways of doing things. The constant disruption that occurs in Silicon Valley leads to a cycle of creative destruction, in which new products and new companies are constantly emerging while old ones fade away."
Disruptive innovation The term disruptive technology was introduced by Joseph Bower and Clayton Christensen in a 1995 article titled "Disruptive Technologies: Catching the Wave" and then further explored by Christensen in his book The Innovator's Dilemma. Christensen later changed his term to disruptive innovation to capture the idea that the business model that the technology enables is what creates the disruptive impact.
X For Y
X for Y is an expression of an analogy in which an entrepreneur's product or service is said to have a similar business model to a well-known, established company(X), but targeting a different market segment or use case (Y). For example, " Airbnb for boats" describes a startup that applies a sharing economy business model to boats, rather than to homes and apartments. On the theory that "there is nothing new under the sun," or as least nothing easy, the X for Y" approach is a natural one in adapting a successful formula to a new situation.
Stealth mode, a term borrowed from the military, refers to a period when starups keep quiet about their plans. Stealth mode is primarily meant to prevent a competitor, especially one with greater resources, from getting wind of the idea and developing it first. It is particularly relevant before IP is filed.
A sponsor company crowdsorces services, ideas, or content by soliciting contributions from a large number of people (a crowd) rather than from employees in a chain of command or from organized suppliers. It is an alternative way to generate input on , or actions that support, a company's business activities. Crowdsourced content that is intended to persist online is known as user-generated content.
Traditionally, failure was only considered as a negative, but Silicon Valley has developed a new way of thinking about it. Because innovation rarely takes the form of a straight line, failures are inevitable on the way to success. From this perspective, in Silicon Valley failure is commonly worn as a badge of honor, not shame, among entrepreneurs. The key is to effectively learn from the failures during the course of creating, exciting, refining, interacting, or pivoting.