The buzz around Internet startups — all you need to know!
A startup is a business, which is designed to grow rapidly.
Internet startups, also known as tech startups, are consider the next big thing post the Startup India campaign, an action plan to build a strong eco-system to nurture innovation and Startups in the country. It goes without saying that a business is set up in order to grow and Internet startups are everything that makes modern day entrepreneurship smart and sexy. Below are few reason that makes tech startups a hot prospects for investors and entrepreneurs.
- Internet startups are scalable. There is literally no limitation for an tech company. You can setup an online store, market it to potential customers, handle transactions online, and have a customer base. Imagine doing the same in the physical world. Internet helps you run a business with bare minimum resource that are not in physical world. Indian cafe chain Cafe Coffee Day, widely know as CCD, took 20 years to expand its reach to 1500 outlets in 29 states of India, a revenue of $200 million per year. Today, Flipkart on the other hand makes almost $1 billion in revenue, post 7 years of its inception.
- Internet Startups can address a larger market. Using internet, you can dominate world markets. In a physical world, your market is limited to your customers. Well known cab aggregator Uber, originally known as ‘Ubercab’, started in San Francisco, California in july 2009. Today, within a span of 7 years, Uber service is available in over 60 countries and 404 cities worldwide.
- Internet Startups requires less capital. The overalls of your online startup will always cost less than the money required to run a traditional business. Money required to rent a shop for one month is more than your monthly cost to claim your online store. Shopify, Kartrocket are few companies providing turnkey e-commerce solution at a dependable service and a cost effective price.
- Rising use of general softwares. General softwares are a set of programs and operating data that are used by people of a particular behaviour, vertical or community. These software are the popular apps like Facebook(social media), Uber(Taxi aggregator), Tinder(online dating community). Building a general software gives a chance to have billions of users across the globe.
- Low regulatory barriers. Although Internet startups have been under low regulations, a lot has changed over time. Read “When entrepreneurs get Lawyered Part-II”. If we take example of running a liquor bar, you can only imagine the kinds of taxes, regulations and licences you would be required to run your business. Online stores are less regulated when compared with business running in the physical world.
- Internet startups are Online virtual Stores — An online startup is a physical layer removed by well build API. Functional use of general softwares allow us to remove physical layer or human effort and make API to perform same functions to increase scale and use. Practo, a doctor appointment booking app, has managed to help a million people book appointments with a doctor for their medical needs. Back in 2010, these million users never thought that waiting in hospital and clinics would soon be a thing of past.
- Modern Internet is open source — Since the inception, open source has been very vital towards the growth of internet technology. Open source communities have helped entrepreneurs build strong technologies with minimum efforts, saving a lot of time. Open source softwares are developed in a collaborative public manner. Github, a web-based repository hosting service has more than 35 million repositories and 15 million users, out of which more than 50% are regular contributor towards building open source softwares.
- Higher tolerance to risks — Failure tolerance is what or how much can be really tolerated by the company in terms of risk and downtime. Internet startups are low at risks as they are comparatively easier to build with low capital requirements.
In short, if you are thinking about working full time on your venture, the first advise I would give, is to start right now. Starting up is like embracing your shortcomings. Until you begin a new venture, you never know what awaits you. An entrepreneurs job is to consult the right set of people and take constant feedback. As an entrepreneur, you need to focus on how much value does the venture brings to your audience and to your own personal growth. Always remember,
An idea is not a mockup,
a mockup is not a prototype,
a prototype is not a program,
a program is not a product,
a product is not a business,
and a business is not profits.
About the author — Shashank Tiwari is the founder of legal marketplace, Lawyered.in, helping startups connect with Lawyers and make informed legal decision. Lawyered is India’s first startup-friendly platform for hiring lawyers, who have worked at top law firms and with well known startups.
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