It’s fair to say that startups are everywhere at the moment. As the world continues to change as a result of the pandemic, entrepreneurs are taking the opportunity to solve the world’s problems through technology and innovation. Online education (Edtech) providers have thrived in the pandemic, with many seeing an increase in the number of users coming to their platforms. For instance, Board Infinity saw a 400% increase in users in 2020! However, as we come out of the pandemic and into a new era of business, are startups worth the risk?
Are startups just a trend jam topic?
The problem with startups is that, unfortunately, lots of them don’t survive long enough to become long-term businesses. 20% of businesses fail in their first year running and 60% fail in the first three years. Some of the reasons behind this are lack of funding, competitors, poor marketing and lack of significant market size.
With so many startups being created every single day, these new businesses are trending, most significantly by younger people. In response to COVID-19, there was a significant increase in the number of people under 25 who created their own business from their bedrooms. These young people saw opportunities in the pandemic for their solutions to thrive. However, we could argue that the reason so many startups fail in the end is because so many people are having the same idea. Not every EdTech platform created during the pandemic is going to survive long-term.
Founders going into the startup world may naively hear of success stories, such as Facebook and Airbnb and ignore the reality of becoming a business owner. The hard work isn’t just in the product idea, but the marketing strategy, team building, competitor analysis and business savvy mindset. Just 1% of startups that reach seed round funding get unicorn status, and this could be partly due to the lack of knowledge founders have when they initially start their business.
However, amongst the startups that ultimately fail, hundreds are continuing to thrive! Many startups become long-term businesses simply because there is a market for the product they are selling. Where there is demand, there will always be startups looking to fulfil it! Moreover, startups create much-needed job opportunities and boost the overall economy. The Government recognizes the value of startups and as a result provides grants, loans, advice and programmes for up-and-coming entrepreneurs.
Startups are a way of giving opportunities for more people to find solutions to current problems, such as climate change, education and sustainability. Although they have always been around, they have become a trend jam topic because of the technology we have access to today. Everyone with a smartphone or computer can create a startup! However, just because startups are a trend, this doesn’t mean they don’t have the potential to become long-term businesses. Like every business venture, some succeed and unfortunately some fail. However, entrepreneurs that are knowledgeable and serious about business have a good chance of success. Yes, startups are a trend, but that doesn’t prevent them from becoming long-term businesses.