Technology start-ups have been at the forefront of developing new business models for decades, often through necessity.
The innovative thinking and grasp of forward-looking technological solutions that characterize the approach of these companies has led them to be ahead of the game in terms of where our culture is heading, and to be able to find ways to survive and prosper where start-ups in other fields have floundered.
One example is in the approach to infrastructure. For a new start-up, renting office space and acquiring equipment is one of the major expenses that needs to be met long before it starts seeing any income. Tech start-ups have met this challenge by building their premises digitally.
An ambitious tech start-up can still be run from a home office, with staff working remotely via cloud-based applications. Using software as a service (SaaS) removes the need for bulky hardware and lowers initial costs significantly. Plus SaaS is scalable, so these start-ups can pay just for what they need and add to it as they grow.
Tech start-ups also pioneered the increasing use of freelance contractors and the idea of promoting a better work-life balance. Not only does hiring specialists on an “as needed” basis make economic sense, it also promotes a working culture that is less about “wage slave” time serving and more geared towards innovative thinking and following your passion. It’s little wonder that, like digital infrastructure, this HR model has spread from small tech firms to the business mainstream.
One could also look at how tech start-ups were among the first to begin using blockchain and accepting cryptocurrencies among a range of digital payment methods. While bigger corporations were slow to transition from essentially cash-based thinking, the start-ups were quick to embrace mobile payment apps, e-wallets and bitcoin as solutions that were both convenient and innovative.
From start-up to multinational
Specific tech start-ups have also radically transformed the businesses they have entered into, often going on to become major multinationals as a result. While a start-up can be defined as a new, emerging business, many retain the same attitude and principles even as they grow rapidly. Indeed, the intention for rapid growth is one of the defining features of a start-up. Those that remain privately owned while partnering with investors and staying true to the founders’ vision can still be considered as start-ups in essence.
Infor was founded as tech start-up Agilsys in 2002 and after a series of acquisitions became Infor Global Solutions in 2004. When new CEO Charles Phillips was hired in 2010, Infor had a reputation as the world’s largest start-up, and was valued at $2bn. Six years later, when investors Koch Industries came on board, Infor was valued at $10bn. The disruptive impact it’s had on the world of software solutions is in large part down to its decision to focus on “micro-verticals” or custom-designed software for niche industry sectors, as well as its groundbreaking CloudSuite product which has brought millions of users onto the cloud for the first time.
The big four
Apple was arguably one of the first modern tech start-ups, when Steve Wozniak and Steve Jobs founded the company in a California garage in 1976. The extent to which Apple has transformed the whole world through computing and the iPhone cannot be overstated. In fact all of the big four tech companies that have radically reshaped the business landscape were start-ups originally. Google and Facebook were basically college projects that got out of hand, while Jeff Bezos also founded Amazon in a garage, setting up an online bookstore in 1994 with $250,000 invested by his parents.
More start-ups that have changed lives
23andMe was founded by entrepreneur Anne Wojcicki in 2006 when genomics tests were not yet officially recognized by the FDA. Within a few years 23andMe was authorized to sell personal genetic reports identifying risk factors for specific illnesses including types of cancer. As a result the company has probably saved countless lives and is now worth over $440m.
Spotify was started by tech entrepreneur Daniel Ek and has totally changed the way we consume recorded music. Digital streaming is increasingly the preferred way of listening for the majority of us and Spotify was instrumental in creating a workable, high-quality alternative to pirate sites like Napster.
Brian Chesky’s idea for an online, peer-to-peer accommodation booking agency led him to launch Airbnb in 2007. A seed funding program from Y Combinator the following year set them on the path to utterly revolutionizing the travel and hotel sector, which has had to drastically rethink a model that had remained essentially unchanged for decades. Airbnb combined the possibilities of digital technology with an understanding that a younger generation craved unique experiences and a more informal approach to travel that was affordable on a limited budget.
These are just a few examples of tech start-ups that have genuinely changed the world. No doubt many more are germinating even as we speak. From new business models to radical new solutions, where tech start-ups lead, others inevitably follow.