As startups — they are what drive innovation, create jobs and drive competition. Starting a new business is fulfilling and somewhat new-age in theory. That being said, not all startups are alike, and there are several types of startups when it comes to the path to entrepreneurship. Comprehending the different kinds of startup businesses can assist aspiring entrepreneurs in picking the correct path for their business ideas and elevating their chances of success. This blog analyzes the various types of startups and what makes them distinct from each other.
Various Types of Startups
Various types of startups comprise scalable startups targeted at rapid growth (e.g., Uber and Twitter), buyable startups striving for acquisition (e.g., Instagram), lifestyle startups attending to individual choices (e.g., subscription boxes), big business startups with substantial capital investments (e.g., Tesla), small business startups (e.g., local cafes), and social startups catering to societal concerns (e.g., Akshaya Patra).
1. Scalable Startups
Scalable startups adopt a concept or idea – usually in the tech sphere – and work to quickly develop the company’s top-end revenue to attain the most significant return on investment (ROI) possible. This category of startup needs exhaustive market research to recognize usable market opportunities. They generally need substantial funding from angel investors and venture capitalists to drive their growth.
They frequently operate in tech-intensive fields like biotech, software, or fintech. For instance, Uber revolutionized the transportation sector by leveraging technology to join riders with drivers on an international scale.
2. Small Business Startups
The primary concern of small business startups is permanence rather than scalability. These small startup companies intend to furnish sufficient capital for financial stability by serving a small target market. In contrast to scalable startups, small business startups prioritize sustainable, steady revenue instead of fast growth. They frequently rely on small business loans, personal savings, or community funding for their launch.
Prevalent types of small business startups include family-managed and operated barbershops, retail shops, and grocery stores.
3. Lifestyle Startups
Lifestyle startups involve transforming passions into a livelihood. These businesses permit you to earn a living while doing tasks you relish. Examples comprise travel blogs, fitness coaching, photography studios, and handmade crafts.
Lifestyle startups usually have low startup expenses and are often managed by small teams or individuals. The main aim is not to sell the business or grow big but to strike a balance between personal life and work while enjoying the activity.
4. Big Business Startups
Large Business Startups are designed for massive enterprises. Startups of these kinds often have great leadership, large initial investments, and a clear market leadership vision.
They want to monopolize large markets and industries, with the underlying cannibalization of these entrenched markets. Companies such as Amazon, Google, and Tesla began as big business startups with aspirations to revolutionize their corresponding fields.
They concentrate on long-term progress and sustainability, commonly reinvesting profits to drive further expansion.
5. Buyable Startups
Buyable startups launch with the aim of getting acquired by more prominent companies. These startups concentrate on building innovative services or products that draw big corporations seeking to grow their offerings.
The objective is to design something precious enough that a more prominent company will desire to purchase it, offering a profitable exit for the founders. Prominent examples comprise Uber acquiring Postmates and Amazon acquiring Whole Foods. Buyable startups often hire in fast-moving technology companies where creativity is viewed very highly.
6. Social Startups
Social start-ups try to address environmental, social or community issues. The firms focus on impact not measure return, but to improve the world. Examples comprise companies working on education improvements, affordable healthcare, renewable energy, and social justice initiatives.
Social startups frequently depend on grants, impact investors, and donations for funding. Their main goal is to foster positive transformation rather than build high returns. They assess success by the impact they exert on the environment and society.
Categorization of Startups
There are various ways startups can be segmented, e.g. stage of development, business model, industry and so on versus target market. Common Categories:
1. Industry Focus
- Tech Startups – These startups are dominating in technological innovation, mobilizing advancements in hardware, software, or a mix of both. Indian examples comprise Ola, Flipkart, and OYO, which have revolutionized transportation, e-commerce, and hospitality.
- Biotech Startups – Pioneering advances in pharmaceuticals, biotechnology, and healthcare, Indian biotech startups such as Bharat Biotech and Beacon are making substantial progress in areas such as drug discovery, vaccine development, and genetic engineering.
- Food and Beverage Startups – Leading innovation in the culinary arena, Indian startups like BigBasket, Swiggy, and Zomato are transforming grocery shopping, food delivery, and restaurant discovery, serving the evolving preferences and tastes of consumers across the country.
- Fintech Startups – Indian fintech startups like Paytm, Razorpay, and PhonePe are changing the financial landscape through technology-specific solutions. They are revamping lending, digital payments, and banking services to meet the varied needs of India’s fast-growing economy.
- Services Startups – Offering a basket of on-demand services, Indian startups like Urban Company, Practo, and Dunzo are reforming tasks, varying from home upkeep and delivery to healthcare services, boosting efficiency and convenience for users.
- E-commerce Startups – Restating retail archetypes with their online availability, Indian e-commerce startups like Snapdeal, Amazon India, and Flipkart have restructured consumer attitudes and preferences, presenting a wide range of products and services via digital platforms.
- Education Startups – Innovating in skill development and learning, Indian startups such as Vedantu, UPES Online, and Unacademy are transforming education delivery with online platforms, providing customized learning experiences and access to excellent educational resources to students throughout the country.
2. Business Model
1. Marketplace Startups
Marketplace startups in India are redefining the way sellers and buyers transact within a dynamic digital ecosystem. Ola, MakeMyTrip, OLX, and Flipkart, among others, have totally disrupted many industries, from travel to e-commerce to classifieds. Indian consumers get the best of both worlds with these startups, offering them maximum choice and convenience in a single centralized transaction marketplace.
2. Freemium Startups
The new business models enable full-featured, premium content or features as a membership (with free content) in order to pull users and build an essential service for no charge. Indian startups like Practo and Zomato have effectively implemented this model, offering critical services to users while commercializing through premium offerings.
3. On-demand Startups
With the speedy proliferation of internet and smartphone connectivity, on-demand startups are redefining the way Indians access products and services. The facts are laid bare by UrbanClap, Zomato, and Swiggy — solutions are on a platter for all your home services, food delivery, etc. These startups have become absolutely indispensable parts of Indian life — indulged in by tens of millions every day — at the point of a technology-led solution to burning problems.
4. Advertising-related Startups
Leveraging advertisements as a leading source of revenue, these startups present free access to their platforms while creating income through targeted marketing. Indian startups like Dailyhunt and InMobi have cashed in on this model, offering services and content while showing appropriate advertisements to users.
5. Subscription-based Startups
When it comes to affordability and convenience, subscription startups thrived via this model.
Bombay Shaving Company, Dunzo and Gaana are similar model businesses that provide grooming products, delivery services, music streaming on a subscription basis. These startups ensure continued recurring income streams by offering customers affordable and easy means of using their desired service/product.
6. Transaction-related Startups
The bunch of startups function on commission / pay-per-use, and they are facilitating business-to-business or user-to-user transactions, charging a fee with each useful transaction. Indian startups like Razorpay and Paytm have disrupted the financial segment by furnishing seamless payment solutions and acquiring revenue through transaction charges.
Conclusion
India has taken major steps to build a startup ecosystem, and due to that, startup registration has grown. Some sectors, like health tech and edtech, witnessed growth during the pandemic. So, in line with the demand, some businesses altered their way of functioning, and understanding your business and the market is crucial to grasping the growth opportunities.
We at Kanakkupillai aid different startups according to their requirements to register themselves while adhering to the latest laws and regulations.
