19 May, 2020

Shall we speculate on a start-up?

“(…) I know: most people get tense when hearing about Start-Ups. This is because, especially in Italy, there is a simplistic and absurd rhetoric on the subject; the image of young kids becoming millionaires in an instant because of a winning idea.  Young TED Talk gurus, or introverted nerds locked inside a garage developing complex algorithms for the next app.

Truth is, this term, so often misused, simply indicates the start-up phase of a new company, with all that this entails at an organisational and structural level.  The term Start-Up is often confused with the design of apps or internet related new projects.

Nevertheless, if it is true that the original definition of Start-Up was limited to a very specific type of company, utilising digital capabilities to offer innovative solutions, with time this has become more comprehensive incorporating all types of new companies operating across diverse sectors.

Start-up, is therefore a broader concept, which can include launching a new project from within an existing business, perhaps a “spin off” that detaches from the parent company to develop a secondary business (… ) “

These are Riccardo Pozzoli’s words from his book ” Non è un lavoro per vecchi”, in which he gives a clear and concise definition of this new phenomenon which for many remains hard to understand.

Not so long ago it was assumed that to start a business you had to have capital available, and that capital had to be organised and available to fund production, and then the idea would enable you to start production!

The “start-up process” is different! The idea is central  – it is the main actor!  The company believes that the good idea will provide the path to the necessary funds!

What are the main start-up characteristics? 

There are four key aspects: scalability, business model replicability, innovation and transitory.

  • SCALABILITY: the ability to grow exponentially using few resources.
  • REPLICABILITY: the business model can be repeated in different geographical areas and in different time periods without the need to make major changes.
  • INNOVATION: (of process or product). Start-ups are created to satisfy a need that has not yet been met (or to create a need that is not yet evident). They are born to upset or to create a market and to innovate.
  • TRANSITORY: Start-ups are transitional and represent the first phase of a company’s growth path that will lead it to become a large company.

We like to think of a Start-Up as a GAMBLE.

For those who make it and for those who invest in it.

To invest in a Start-Up is a gamble, but also a great CONTRIBUTION TO THE INNOVATION OF OUR COUNTRY.