Page 13 - THE NOTICEBOARD NEWSPAPER EDITION 68 MAY-JUNE 2021
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October, 2008
May - June, 2021 Page 13 Page 13
Difference Between Startup & Business Idea
develop their business model Here are the 4 key traits of a alone is meaningless
after launching, sometimes a monopoly: without a product that's up
couple years later. · Proprietary to the task.
· They can do so technology. This doesn't
because of their rapid have to be software or Google was a startup. Before
growth, which keeps hardware, it can also be a Google, no other search engine
money from investors result of great, integrated had developed a proper,
pouring in. design (like the iPad), but
whatever you do should
This makes startups well- be at least 10x better than
the existing solution or
replace it altogether.
· Network effects. With
every additional user,
products like WhatsApp,
Facebook, Instagram,
Xbox Live, Reddit etc.
become a little more proprietary technology it
attractive to those, who bases it's results on (Yahoo
aren't users yet. The had just gobbled together
something from all the
greater the network, the
companies they had acquired),
larger the value to the
and so Google won. It's been a
individual.
monopoly since pretty much
· Economies of scale.
2000, when it indexed more
Keep scale in mind from
sites than anyone and Yahoo
day 1. Your startup must
started using Google's
get stronger as it gets
suited to solve big, important
bigger, because fixed cost technology. Google still reaps
problems, by doing things in the profits of that monopoly
an entirely new way, instead goes down. A pizza 16 years later.
of making incremental restaurant chain is hard to
progress.
DuckDuckGo is a business. It
Business idea is horizontal
doesn't replace or succeed
(like globalization, which
search the way we do it now,
scales and extends what
but instead is another player
exists already), the other,
in the search engine industry.
startup is vertical (like DuckDuckGo creates
technology, which gives us a
competition. It's carved out a
new way of doing things).
niche for itself (focus on
privacy) and it's successful,
The benefit of building a
scale. Software is easy. but it's not a “startup”.
startup is that it will, if
· Branding. A strong
successful, turn into a
brand amplifies the effects Based on this definition, you
monopoly, which ensures of a monopoly, because it can use a variety of questions
profits for a long time, that makes its unique to pinpoint whether what
can then be used to created
standpoint visible to the you're about to embark on fits
further vertical progress.
masses. However, brand
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