الشركات الناشئة مقابل الشركات الصغيرة والمتوسطة: فهم الفروقات الرئيسية

 

Introduction

The term startup is a hot topic in today's world, from political discussions to public discourse. Policymakers globally are prioritizing the encouragement of new businesses, especially in the form of startups. These are newly formed companies or entrepreneurial ventures still in their early stages of development and market analysis. But what exactly defines a startup, what are its unique characteristics, and what theories try to explain their existence and evolution? Let's dive in.

Defining a Startup: A Multifaceted View

Defining a startup isn't as straightforward as it might seem. Various scholars and organizations offer different perspectives, highlighting diverse aspects of these innovative entities:

• A. Carter et al. (1996): Simply put, a startup is a newly born company, without previous history of operations.
• Cho and McLean (2009): They describe startups as temporary organizations that create innovative products and/or services using high technology, often operating in uncertain and risky scenarios. (Zaeem, 2021)
• Krejci et al. (2015): A startup is a new and temporary company with a business model based on innovation and technology, possessing potential for rapid growth and scalability.
• The European Start-Up Monitor (Tobias, Christoph, Jana, & Julia, 2015): This definition uses three criteria: established for less than 10 years, bringing innovative technologies and/or new business models sales.
• Steve Blank (Genome, 2021): The renowned Silicon Valley entrepreneur defines a startup as a temporary organization designed to search for a repeatable and scalable business model.
• Aleksandar, Jelena, Kristina, & Olivera (2022): A startup is a human-made institution designed to create a new product or service in the midst of extreme uncertainty. Unlike small or microenterprises, startups often look for markets that don't yet exist, focusing on unsolved problems or unrealized community needs. Their solutions aim for a big societal impact, enabling rapid growth.

It's clear that innovation and risk are central to the startup narrative. To solve problems, startups must innovate and gain market acceptance. They face various risks: technical risk (product-related), customer risk (market-related), and business model risk (Luh Putu & Vincent, 2022).

The Algerian Context

Interestingly, Algeria has its own specific criteria for a startup (GOVERNMENT, 2020):

• Younger than 8 years.

• Business model based on innovative products, services, or ideas.

• Annual turnover not exceeding a National Committee-determined amount.

• Company's capital owned at least 50% by specific persons or investment funds, or other "start-up company" labeled institutions.

• Large growth potential.

• Number of workers not exceeding 250.

The Distinctive Characteristics of Startups

As the definitions suggest, startups possess unique features that set them apart from traditional businesses (Shekhar & Priyanka, 2017). They are highly innovative and often have unconventional structures, with little room for rigid organizational formalities. Here are some key characteristics:

• Innovation/Disruptive: Startups are driven by high levels of innovation, leading to disruptive approaches in serving customers and markets.

• Limited Size (Initially): Their operations are typically limited in size, though they have the potential to grow significantly.

• Flat Organizational Structure: Startups often feature a very flat, non-hierarchical structure. Founders work closely with teammates, fostering a collaborative environment where employees are seen as integral to innovation.

• Rapid Growth Potential: Due to their innovative products and services, startups have a tendency for fast growth in revenue and market share.

• Unconventional Financing: Unlike traditional businesses that rely on banks, startups are often funded by angel investors, venture capitalists, and entrepreneurial funding agencies.

• High Risk and Uncertainty: The inherent innovation and uniqueness of startup offerings mean they are highly risky ventures, with elevated levels of uncertainty.

• Singular Product/Service Focus: Initially, or sometimes permanently, startups focus on a single product or service for their targeted market, unlike diversified companies.

• Limited Available Resources (Initially): Contrary to popular belief, startups often struggle to attract resources in their early stages, only gaining significant resources once their product or presence is recognized.

The Importance of Startups for Economic and Social Development

Startups play a crucial role in a country's economic and social development. Their increasing importance highlights the need to cultivate an entrepreneurial culture (Singh, Dubey, Sharma, & Akoijam, 2020 ). Here's why they matter:

• Economic Growth: Ambitious entrepreneurs and their rapidly growing companies are key drivers of economic growth, introducing revolutionary technology and creating new industries.

• Job Creation: Startups are significant job creators, often outperforming larger companies in this regard. Their growth attracts investors, benefiting the nation's employment landscape.

• Promoting Research & Innovation: Startups implement innovations and technologies, improving production and productivity. They also contribute to the promotion of research and innovation systems and instill proactivity in society.

• Connecting with Giant Companies: Many technology giants now outsource tasks to startups, which helps increase the startups' cash flow.

• Improved Standard of Living: Startup entrepreneurship can shift societal values, fostering a mindset aligned with knowledge and creativity, ultimately improving people's living standards, particularly in rural areas.

• Bringing New Competitive Dynamics: Startups are highly dynamic economic organizations, injecting additional dynamics and competitiveness into the economic system, ensuring a healthy and vital economy.

Startups vs. SMEs: Key Distinctions

While both startups and Small and Medium-sized Enterprises (SMEs) are businesses, their fundamental approaches and goals often differ significantly (Johanna, 2017).

• Growth and Scalability: The primary difference is that startups are designed for rapid growth and scalability. They aim to sell to a very large market, which is why many are tech-focused, leveraging online platforms to reach a global audience. Paul Graham famously stated, "that's the difference between Google and a barbershop. A barbershop doesn't scale."

• Funding Relationship: Startups typically seek angel investors or venture capital firms, who often take a more active role in the company due to the higher risk involved. SMEs, on the other hand, usually rely on loans, grants, or their own revenue streams.

• Exit Strategy Planning: Startups, especially when seeking investment, almost always need a clear exit strategy from the outset. Investors want to maximize their return, often through acquisition or an IPO. For traditional businesses, an exit strategy isn't typically a prerequisite at the start; the owner has more flexibility regarding the company's long-term future.

The Development of Startups as an Innovative Form of Entrepreneurship

Entrepreneurship is fundamental to the innovative development of an economy, increasing societal wealth and improving quality of life. It boosts revenues, enhances the supply of goods and services, and strengthens a nation's competitiveness in international markets. Entrepreneurship thrives on competition and the creation of a competitive advantage, often derived from intangible assets like employee knowledge, know-how, and experience.

The increasing focus on innovation in enterprise planning is driven by several factors (Mykhailo, Stanisław, & Robert, 2019 ):

• Growing societal wealth and demand for leisure services.

• Need for complementary services (e.g., transport).

• Increased work efficiency due to technological progress.

• Enterprise specialization.

• Functional innovation: Meeting previously unknown social needs.

• Subject innovation: Exchanging equipment for better-performing alternatives.

• Process innovation: New production methodologies, streamlining, optimization, and environmentally friendly methods.

• Organizational innovation: Improving organization, production, and work safety.

Startup Theories: Understanding Their Foundations

While startups are a relatively new focus in academic theories, some existing frameworks implicitly address their creation and evolution. These theories can generally be categorized into three main areas (Aidin & Hiroko Kawamorita, 2015):

Organization Theories Focusing on Startups

Early scholars like Van de Ven et al. (1984) identified entrepreneurial, organizational, and ecological approaches to studying startup creation. The organizational approach suggests that the initial planning and development processes significantly impact a new organization's future structure and performance.

However, many traditional organization theories (e.g., organizational ecology, configurations, contingency, resource dependence, uncertainty theory) are broad and often consider startups as mere samples rather than central subjects of study. Gartner (1985) and Katz and Gartner (1988) are notable exceptions that more specifically relate to this category.

Management Theories Focusing on Startups

Management, at its core, is about coordinating efforts towards common goals. While management theories might seem less directly focused on startups in an organizational sense, they become highly relevant when considering startups as individuals or teams working together.

Management theorists are increasingly interested in startups (Davila et al., 2003). Theories like strategic management, small business governance, human resource management, team management, and complexity theory are used in startup research. However, these theories often treat startups as case studies rather than developing specific startup-centric frameworks.

Entrepreneurship Theories Focusing on Startups

This category of theories is arguably the most directly relevant to startups. Van de Ven et al. (1984) highlighted the entrepreneurial approach, focusing on the characteristics of the founder. While the founder is crucial, entrepreneurship theories delve deeper into various aspects of startups.

As Salamzadeh (2015) notes, entrepreneurship theories on startups fall into macro-level theories (e.g., Schumpeter's theory, population ecology) and micro and meso-level theories. This strong connection stems from several reasons:

• Core Concepts: Entrepreneurship deals with ideas, creativity, innovation, new product/service development, and opportunity – all integral parts of a startup (RadovicMarkovic & Salamzadeh, 2012).
• Early Stages Focus: Entrepreneurship theories are naturally more applicable to the early stages of a business or organization.
• Idea to Business: Startups are fundamentally about transforming ideas into viable businesses, a critical aspect of entrepreneurship studies like new venture creation, value creation, and opportunity recognition.

Startups represent a dynamic and evolving force in the global economy. Understanding their definitions, characteristics, and underlying theories provides a comprehensive view of these innovative engines of progress.