A Startup Is Born

About Inception, Frustration and Arbitrage

  1. The Lifestyle startups
  2. Small Business usually family owned
  3. Silicon Valley type startups
  4. Startups created to be sold off
  5. Large Company startups
  6. Social startups

Inception

At a very basic level, certain stars align (resources are available) to create a solution for a problem faced by the entrepreneur. It could be a 15 in 1 cooler or an algorithm to solve financial problems. Lets say for example, a Phd in math could be applied to a problem. But, basically an entrepreneur feels that there are people (addressable market) who would pay a price to alleviate a common problem. Typically, the entrepreneur uses a domestic market to validate his/her concept. This is because of the relative familiarity of the local market.

Frustration

When dreams meet reality, a certain frustration sets in. Seasoned Venture Capitalists will invest only when a clients are on board and a revenue stream is established. Clients with existing IT systems are hesitant to incorporate an untested technology.

Arbitrage

Arbitrage, in traditional stock market terms, is buying a stock low in one market and selling the same stock high in another market where it is trading at a premium. In simple terms, it involves taking advantage of price differentials in two different markets.

The Bottom Line

Societal perceptions of the glamour and status associated with startups need to be weighed against reality to truly understand the ramifications of being an entrepreneur.

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Futurist@The Intersection of Finance, Tech & Humanity. Stories of a Global Language: “Money”. Contributor @ Startup Grind, HackerNoon, HBR. Twitter@akothari_mba

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Abhishek Kothari

Futurist@The Intersection of Finance, Tech & Humanity. Stories of a Global Language: “Money”. Contributor @ Startup Grind, HackerNoon, HBR. Twitter@akothari_mba