What Makes Startups Different From “Normal” Businesses?

First-time entrepreneurs and iPhone app developers often want to know what exactly makes startups different from regular businesses. Especially for those with backgrounds in “traditional” business growth, the differences can be confusing. It may surprise you to hear that the answer isn’t simply that startups are more tech-based than regular businesses. Although most startups do admittedly have a tech focus (since the term was born in the dot-com era), the “secret sauce” of startup culture is a little more complex.

Definitions change slightly from source to source (Wikipedia describes startups as “ innovative in a process of development, validation and research for target markets”), but overall everyone in the business and tech worlds can agree on three key terms: experimentation, innovation, and risk.

Experimentation

Traditional brick-and-mortar businesses may be high risk, but they come with a very different kind of risk. With traditional businesses, the business plan is usually closely modeled on existing successful businesses. For example, a hot dog stand in one part of town will be more or less the same (outside of branding) as other hot dog stands. For them, the risk comes into play when you consider how many similar hot dog stand there are — and how slim the margins can be as everyone fights to offer the best value.

Boston iPhone app developers, on the other hand, face a different sort of risk: generally their idea will be experimental or disruptive in some way. While they have fewer competitors at the start, there’s a built-in challenge convincing customers to buy in the first place. After all, everyone knows what a hot dog is and why they want one — but explaining how a complex medical app enhances preventative care can be much more challenging.

Innovation

With limited capital and resources compared to the big names in tech, iPhone app developers seek to accelerate rapid growth by solving user problems in an innovative way. Rather than replicate what already works, startups try to break it down and build something better on top — with an eye towards benefiting customers as well as their bottom line.

Risk

At the end of the day, iPhone app developers face a tough battle. The rewards are huge for those who succeed ($18.4 billion in Q1 of 2016 alone), but in today’s competitive app ecosystem it takes more than just a good idea. Execution, from the development stage to late-stage pivots, is equally as important for those who want to survive long enough to become the next Instagram or get acquired.