You may have heard about digital startups, how they are redefining the business world and introducing new business models, but what are they really? What characteristics do they have?
Read on to find out.
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Digital startups: what they are
Digital startups are innovative high-tech companies that seize the opportunities offered by the web and the digital transition to create new business models or renew existing ones.
These are companies with strong growth and scalability potential, capable of reaching the global market at relatively low cost.
Characteristics of digital startups
Digital startups differ from traditional companies in a number of distinctive features, a short list of which follows.
Digital startups offer innovative products or services that address unmet needs or create new value opportunities for customers. The innovation may concern the product or service itself, the production or distribution process, the business model or the communication channel.
The business model of digital startups is replicable on a large scale, without the need to change the product/service or organisational structure. In other words, digital startups are able to increase their turnover without necessarily raising costs.
Digital startups generally grow rapidly and exponentially (scalability), using network economies and cloud platforms to their advantage. This allows them to reach a large number of customers with a limited expenditure of resources.
Digital startups operate in highly dynamic and competitive environments, where the rules of the game are constantly changing and the risks are high. Therefore, they cannot but be flexible and adaptable, and frequently experiment and validate their market and product hypotheses.
Digital startups seem more agile than traditional companies. Their assumed agility enables them to adapt quickly to market changes and implement new ideas based on customer feedback.
Examples of famous digital startups that have become icons of the digital transition
Over the past decades, numerous digital startups have sprung up and grown, revolutionising various sectors of the economy and society. 4 well-known examples are:
Airbnb is a platform for exchanging and selling accommodation between individuals, allowing users to rent or offer rooms, flats and houses all over the world. Founded in 2008 by Brian Chesky, Joe Gebbia and Nathan Blecharczyk, Airbnb is today one of the most famous and successful digital startups, with a valuation of more than 100 billion dollars.
Spotify is a music streaming platform, offering users access to millions of tracks, podcasts and personalised playlists. Founded in 2006 by Daniel Ek and Martin Lorentzon, Spotify is now the world leader in digital music, with over 365 million monthly active users.
Netflix is a video streaming platform, offering users access to films, TV series, documentaries and original content. Founded in 1997 by Reed Hastings and Marc Randolph, Netflix is today the world leader in digital entertainment, with over 209 million subscribers in 190 countries.
Uber is a mobility platform that connects users and drivers to offer transport, delivery and vehicle rental services. Founded in 2009 by Travis Kalanick and Garrett Camp, Uber is today one of the most controversial and influential digital startups, with a presence in over 10.000 cities in 69 countries.
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Digital startups represent the future of business and are likely to continue reshaping entire sectors. If you don’t want to be left behind and want to ride the wave of digital transformation, contact us.
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