We are developing several large online startups – our own and clients, we also have a fairly large flow of requests for the development of such projects, so we see how companies react to the market, what their needs are and what factors lead to success or failure.
Prerequisites for creating digital startups
New startups grow on the basis of unique ideas or copy existing ones while adapting to the target audience or field of activity.
If there is no original idea, startup owners create a copycat – they copy the business model and technology of an already existing foreign or domestic company. For example, there are more than 40 Uber clones in the world, adapted for different countries and audience segments.
If the market is insufficiently saturated with analogs, copies of the “Aggressive Aliens” type appear. They offer their clients more favorable conditions, actively take part in the audience and then crowd out competitors. But not all copies are profitable, there are a couple of notoriously failed projects: social networks without significant ideological changes and search engines.
Financially successful startups are aligned with the time, and agenda, needs, and interests of the audience. This year, there are several areas in demand for the launch of the project.
Ecosystems, marketplaces, and super apps. The ecosystem approach in business is very popular today, this organizational model helps to increase profits through the sale of additional services and acquire loyal customers. Companies are developing digital platforms that are built around customer needs or connecting to marketplaces to unlock a new source of leads.
Leading companies create super apps – high-tech mobile versions of ecosystems. They usually grow out of financial services, social networks, taxi ordering, and delivery services, but they can appear in any area.
FinTech. Financial technologies are actively developing. Banks remain the main players, but new startups appear on the market and claim part of the audience. Such services can provide one or several financial services: mobile banking, contactless payments, e-wallets, online lending, etc.
The Central Bank supports the initiatives of entrepreneurs, for example, with its participation, a system of quick payments has been created, in which instant transfers can be made by a mobile phone number to any participating bank.
EdTech. The online education market has gone through a revolution in 2020, as new opportunities have opened up for people at a distance: a lot of free time, the prospect of retraining, or simply gaining new knowledge for themselves. In general, we began to perceive digital professions and courses in a different way: as a good opportunity to learn and earn money.
Geekbrains, for example, said it had a 740% increase in new student numbers from mid-March to June 2020. All this led to the emergence of new players on the market.
Artificial intelligence and machine learning. In 2020, artificial intelligence technology has become widespread – with its help companies are coping with the massive complexities caused by the pandemic. Medical clinics, for example, see it as a prospect not only to automate interaction with patients and recording but to start diagnosing coronavirus remotely.
Each business is unique in its own way, there are no two identical ideas and their implementation. But everyone follows a similar path from creation to maturity, attracting investment and monetizing. Let’s take a closer look at the life cycle of a startup.
Stages of development
There are several stages in the development of startups, and most of them do not move beyond the first and remain at the level of the idea. To be among those who have gone through all the steps, you need to remember the importance of monetization and the financial side of the matter.
1. Sowing stage. Basic business ideas are formed, layouts are built, a team is assembled. At this stage, startup owners raise funds, so it is especially important to understand why a business idea will be financially successful and to convince potential investors of this.
2. Launch. Entering the market, fighting competitors for an audience.
3. Growth. If a startup has survived the previous stage, it begins to bring the first profit and capture a market niche. There are a number of metrics you can rely on to measure performance:
• ARPU (Average revenue per user) – average revenue per user;
• CLV (Customer lifetime value) – the income that the client will bring to the company during the entire period of cooperation;
• CAC (Customer acquisition cost) – the cost of attracting a customer;
• MRR (Monthly recurring revenue) – regular monthly income.
4. Expansion. The startup is capturing new markets, attracting partners, and increasing revenue.
5. Maturity. The startup is reaching its peak, running like a business as usual. At this stage, the investor can sell it to a larger holding.
Samuel Judge has been working as a content writer in https://servreality.com/ for 5 years. During this time, he became interested in the topic of VR/AR and technologies of the future, which helps him create interesting content.