In the past, launching a startup wasn’t as challenging as it is today. Anyone with a good business idea could embark on the journey by finding the right angel investors willing to take a chance on you.
However, we live in an innovation-hungry era, and formulating a good idea isn’t enough anymore. You would need to put in tremendous effort and plan to execute your concept and ensure its success.
Despite the complex challenges that arise in founding a startup, many entrepreneurs have been able to penetrate the various industry verticals and make a name for themselves in their respective fields.
Types of Startups
Each startup belongs to a specific category. According to our research, there are six different types of startups: lifestyle, small businesses, scalable, buyable, large business-owned, and social entrepreneurship.
The different types of startups mentioned above are started with a concept, and each type scales to achieve a specific goal. Let’s look at the six different kinds of startups and explore each in detail.
Lifestyle startups are owned by individuals driven by their passion for what they do. This startup type is founded by individuals who create a business based on their lifestyle and don’t mind devoting their time and energy to developing a company based on their hobbies or favorite activities.
This type of business can be started by an avid traveler starting their own tour guide business or a home baker starting their cloud kitchen. You can undoubtedly create your lifestyle startup if:
- You’re adept at your hobby and can make money from it
- You’re self-disciplined
- You’re passionate about your hobby
Small Business Startups
Small business startups are usually owned by individuals who do not want to scale their business but want to ensure its longevity. Entrepreneurs with this type of business typically want to earn enough to be financially stable and afford a comfortable, easy life.
Small business startups are, in most cases, family-run and cater to a small target market. Some typical small business startups in the past included barbershops, grocery stores, travel agents, and retail stores.
Today, most small businesses also include virtual stores catering to the community. These small businesses have been generating jobs, have their websites and social media pages, and are scaling.
A scalable startup has the potential to grow and be a giant in its field. However, this startup requires funding, and the expansion process is usually very swift.
Employees working for this startup type are usually exceptionally talented and adept at their skills. Their primary goal is to generate more revenue without spending a fortune. Some famous examples of scalable companies include Uber and Airbnb.
Buyable startups are created by executing successful ideas but need investment to grow and develop. Often, startups that make mobile applications aim to sell them to larger companies in the same niche.
Several companies, including Google and Facebook, buy technological solutions from these startups. Buyable Startups require investment from high-risk investors, but these are the ones that make the difference.
Large Business-Owned Startup
Prominent business-owned startups are also trendy. These startups are driven by innovation and have the time to market their creations. These startups’ goal isn’t just to improve their business but to develop disruptive innovations, leading to superior or unique business models.
For this reason, companies that fall into this category need to keep up with changes to stay competitive. Due to their self-sufficiency, they can adapt and grow accordingly as new demands, trends, and transformations arise.
A great example of this is Apple which, in 1976, launched its first computer and has not stopped innovating since. Several technological changes were not only followed but also created by it.
Last but certainly not least is Social Startup, which is extremely important for many entrepreneurs. A social startup company is founded by those who are “socially ambitious” and want to make a positive difference in the world.
Wealth, for a social entrepreneurship startup, is defined as the benefit to communities, workers, or regions where the founders are present. For-profit or for-non-profit social startups aim to improve social and human conditions.
Contributing positively to society is what matters. Many charitable or non-profit organizations fight poverty, raise awareness about a particular issue, or raise funds for clean water projects.
Launching a startup can help you achieve your entrepreneurial goals, whether you wish to create a community-based business, resuscitate a stagnant company, or start a charity. Each startup type has unique business goals, so what kind you choose will depend on you and your business idea.