Научная статья на тему 'Startup development: strategic point of view'

Startup development: strategic point of view Текст научной статьи по специальности «Экономика и бизнес»

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Ключевые слова

Аннотация научной статьи по экономике и бизнесу, автор научной работы — Zopunyan Y.S.

The article analyses different strategies of the startup development. The author considers such phases of the startup development as pre-startup, launch, post-startup. The author analyzes factors that affect startup development. The paper presents conclusions about key elements of startup's strategic development.

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Текст научной работы на тему «Startup development: strategic point of view»

УДК 334.7



Зопунян Ю.С.

Южно-Российский институт управления - филиал Российской академии народного хозяйства и государственной службы

Zopunyan Y.S.

South-Russia Institute of Management - branch of Russian Presidential

Academy of

National Economy and Public Administration

Аннотация: В статье анализируются различные стратегии развития стартапов. Рассмотрены такие фазы развития стартапа как пре-стартап, запуск, пост-стартап. Проанализированы основные факторы, влияющие на развитие стартапа. Делаются выводы о ключевых элементах стратегического развития стартапа.

Ключевые слова: стартап, фазы развития, стратегия, выход на рынок, стратегическое развитие.

Annotation: The article analyses different strategies of the startup development. The author considers such phases of the startup development as pre-startup, launch, post-startup. The author analyzes factors that affect startup development. The paper presents conclusions about key elements of startup's strategic development.

Key words: startup, phases of development, strategy, market entry, strategic development.

Strategic development is one of the most important aspects of the startup evolution. Right idea, big investments, professional team - all this won't help startup become a full-fledged company without the right strategic development. All successful startups, whether consciously or not, had lined up a winning growth line that allowed them to enter the market and attract investments. In this article, we would like to analyse startup development from the strategic point of view.

Economists identify seven different strategies of the startup development.

1. Wave. Innovations can be described as waves. Companies can participate in their creation, growth, and slide on their crest. The most successful startups manage to participate in all three of these processes. However, only a few companies can create possibility of a new wave emergence.

2. The emergence of a new product in a new category of products. One of the strategies for a startup can be finding a space in the market, searching a product that was missed by the market for some reasons and establish its production.

3. The emergence of a new product in an existing product category. Startups can take advantage from changes in market conditions that create an opportunity to penetrate the market.

4. Modernization of the value chain. Rationalization of the value chain can take many forms. The main trend in recent years is dropping off non-core functions. Startups could be involved in outsourcing of such business processes

6. Implementation of the advantages of government's economic policy. Startup can take a benefit from the fact that many countries support those or other types of business.

7. Transfer of ideas to new ground. Many startups have succeeded because of the idea that had been transferred from some conditions to another [1, c. 17].

After choosing one of the above strategies startuper should, at least theoretically, imagine how his business would grow. Formation of the successful plan for startup development requires a clear idea of what steps it must pass on the way of becoming a full-fledged company.

Startup in its development, usually, goes through the following phases:

1. Pre-startup phase. This phase includes steps that precede the direct launch of the startup and to market entrance [2]:

1.1. Precondition stage. This stage is characterized by the fact that startuper already has the idea and a clear understanding of client's wants, but lacks a clear understanding of how to implement this idea and how it should be promoted.

1.2. Preparation stage. The stage is devoted to the market analysis, business and marketing plan creation and targeting of the product's future market niche and audience. Also at this stage, startup begins seeking first investors.

1.3. Prototype creation . Involves the creation of a working prototype of the product with the most basic functions.

1.4. Release of the product's alpha version. Alpha version of the product - the stage at which the product is already developed, but is not tested, yet. In the process of testing, product is made some adjustments that were not taken into account before. Also, at this stage startup begins to find first customers.

1.5. Closed beta test. Beta version of the product already has a form similar to commercial except a small number of customers, who were invited to try it out free and report deficiencies and possible improvements.

1.6. Public beta test. Almost the same as closed beta test except the fact that anybody could participate in it.

2. Launch. Decisive, in our opinion, phase in the startup development, which includes market entrance.

2.1. Launch of the project, or early startup-stage. This stage involves the start of mass production of the product, active marketing, shipping to retailers the first consignments of product.

2.2. Active work on the market, or late startup stage. This step involves the formation of company's niche market, by adjusting the target audience, taking into account market conditions. At this stage, it becomes clear whether the startup will transform into a full-fledged company in the future.

3. Post-startup phase. If the startup has successfully passed the initial market test in the previous phase, it begins to transform into a fully-fledged company.

3.1. Growth stage. At this stage startup usually has a stable position on market and is on track to conquer the niche, targeted at the pre-startup phase;

3.2. Expansion stage. By the expansion stage, startup, usually, has already implemented the business plan on the primary target market, and begins to enter other markets. Company can expand by itself or through the purchase of the other companies.

3.3. Exit stage. At this stage, investors that previously participated in the startup financing begin to exit the business. Venture investment funds finance promising startups that are in the initial stages of growth and sell shares after startup becomes successful. The exit can occur through the sale of the company or an IPO.

Of course, it is not necessary that every successful startup should pass all the above steps. Sometimes startups simply jump some of them. Nevertheless, any startup, located on the stage of idea should consider its strategic development, primarily through the lens of this scheme. It is not worth to waste precious time on reinventing the wheel, when you should better focus on your idea, taking above phases of development as a basis.

After that, in our opinion, it is necessary to analyse the key factors of the startup development. Simply put, the factors that determine whether a startup will survive or not.

Founder's factor. The number of startups created entirely by one single person tends to zero. Generally, the fact that the founder of a startup is alone likely means that he is just is not able to find like-minded people and get them interested in his idea that is a very alarming sign itself. Of course, there is another two options. First is trivial - greed. Startuper just does not want to share his future business, which he believes will surely be successful, with someone else. Second option is much more common - arrogance. Entrepreneur is confident that he can cope alone with all the challenges that his startup will face. In general, it should be noted that one man could hardly be able create a startup and find solutions for all that problems that arise from new business. However, the situation above has a downside. There are many examples where a startup founded by several people, begins to fall apart because of conflicts between its founders [3]. Contradiction between startup founders is a frequent and widely known phenomenon [4, a 44]. If leaving founder has played a key role in the startup, then his departure is very likely mean very negative consequences up to complete collapse of the business. Therefore, in our opinion, to avoid this problem you should just start a business with a person who has a similar worldview.

Location factor. Quite often, a promising idea, which is developing successfully in one place, is completely unsustainable in the other. For example, it is difficult to imagine that Facebook could be founded not on the basis of the world-famous Harvard University, but in some obscure college. Population, level of education, standard of living, proximity to financial flows, infrastructure development, cultural characteristics - all these factors must be considered before creating a startup in a certain area.

Idea selection. Idea - is the basis of a startup, its foundation. Without the right idea, startup is almost certainly doomed to failure. Of course, sometimes startups survive even with false ideas set in its base, changing the vector of its development during its development, but this is rather an exception than a rule.

Timing the launch. Protraction of the entry into commercial operation of the project, as well as a premature start, is a negative factor. On the one hand, a slow start due to developers' perfectionism almost certain leads to negative consequences for the startup, especially if it occurs after the receipt of the investment when every extra day of startup's operation could cost thousands of dollars. However, on the other hand, excessively fast start may result in the market entry of "raw", unfinished product that does not look trustworthy and receives negative reviews from critics. As is known, first impression could not be made twice. Therefore, in our opinion startup founders should follow the "golden mean" over market timing. In some cases, excessive haste can be as dangerous as excessive perfectionism.

The right balance in Client/Money pair. A lot of startups collapse due to incorrect prioritization in client/money pair. Fully-fledged company, which has a sustainable market share, could shift the focus to financial component (with a great caution). However, thinking about the financial side of business, before forming a stable client base is impermissible for startup. The main target for a startup, in contrast to the fully-fledged company, is not a profit, but a market share. From a financial point of view, the main thing is "going to zero", when income is not excessed by expenses. Monetizing service that already has a stable customer base is much easier than expanding its unpopular paid analogue.

The right balance in Investments/Monitoring pair. In our view, there is a definite relationship between the volume of investment and investor's intervention in the startup management. After investing low amount of money, investor usually does not intercept control over startup. At the same time, major investments require the transfer of at least a blocking stake of 25%, or even full

control over startup (51%) to the investor. In our opinion, attracting more investments to the pre-startup phase is fraught with loss of founder's control over his startup, resulting in an inability to quick adapt to external environment (convincing investor who is only interested in the return of his investments usually is not a momentary thing). Investor who constantly interferes in management can bring startup to the edge of collapse. To avoid this situation, startups must begin with minimum investments to create alpha and beta versions of their product, and only then seek for big money to enter the market.

Adaptation to external environment. As you know, any business plan is as ideal as intelligent and experienced its creator is [5, с. 35]. Not all theoretical calculations survive after a meeting with reality. Market dictates conditions and operates by the rules that could not be always clearly defined and counted mathematically. Startuper task is to respond quickly and adequately to the ever-changing environmental conditions, adjusting the business model in accordance with the startup's current position on the market.

Attention to peripheral business processes. Quite often, startups do not want to deal with unimportant from their point of view issues, focusing on the main target - product or project creation. However, questions, which accompany any startup, will not be solved by themselves[6]. Competent legal registration of the company, selection of the most suitable legal form of ownership, necessary licenses obtaining, copyright registration of created intellectual property, business protection from insiders, smart GR-management, tax optimization (in the later stages of startup development) - all of these questions, that are not directly related to the main target - product creation and its delivery to the client, yet play a decisive role in the startup's successful strategic development.

Thus, the key elements of the startup's strategic development include:

• Choice of the right development strategy. Choice of the development strategy is the cornerstone of a startup, which determines the vector of its growth.

• Organization of the startup's operation in a view of the key factors of development.

• Composition of the plan of startup development in accordance with the future development stages. On the way of becoming a full-fledged company, every startup passes successive phases of development. Startuper's goal is to create a clear to-do list for each stage.

Список литературы:

1. Зотин А. Восемь идей для инноватора./ Александр Зотин // Коммерсант. Приложение №111 от 21.06.2012. С. 17-19

2. Конструктор Успеха [Электронный ресурс] //URL: http://www.constructorus.ru// (дата обращения:07.04.2015)

3. Funders and Founders [Электронный ресурс] //URL: http://www.fundersandfounders.com/ (дата обращения: 07.04.2015)

4. Зарайченко В.Е. Эстетические компоненты культуры управления // Государственное и муниципальное управление. Ученые записки СКАГС.

2009. № 2. С. 43-55

5. Манджиева Д. А. Креативно-инновационное развитие предприятия // Государственное и муниципальное управление. Ученые записки СКАГС.

2010. № 4. С. 33-41

6. Васильев П.П. Управление развитием интеллектуального и человеческого капиталов: практика, проблемы и их решение // Государственное и муниципальное управление. Ученые записки СКАГС. 2013. № 3. С. 64-73

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