Startup development scenario

What is a startup's path from an organizational standpoint? Let's now look at a startup's fate from a slightly different angle. How can a startup develop in terms of its team, the company and so on? The first scenario is when a startup, from the very beginning until it reaches its ultimate goal of turning into a large company, develops with the same team: the same founders invested their own money, then found more somewhere among friends, then started reinvesting the profit. And in this way the startup grew to a great height with the same team. Such cases exist, and this can, in principle, be considered the ideal scenario.

The second scenario is when a startup, having reached a certain height and become interesting to other players in the market, is bought out by some other large company. For example, many small startups that performed one specific function were bought by giants such as Facebook, Google and so on. And by regional players in any country's market as well. I believe this scenario is in no way worse than the first. Moreover, many startup founders, when creating their project, build in a scenario of selling to a large player from the outset. What's more, they even assume that some large player will most likely buy them right away, from the very start.

They tailor everything to the future buyer: the program code, the design and the structure. I wouldn't say this is a bad move. It is quite pragmatic, quite suitable for a pragmatic, calculating entrepreneur who wants to make money on one specific, well-defined action. If a founder has chosen this path, the path of a later sale to a large player, I advise not to be shy about it and to say so openly. And not just to hint through design, code and so on that you are adapting to a large player. Moreover, you can send a direct message to that large company and say: your functionality is missing this one feature, which we have successfully implemented, and it would be more profitable, faster and cheaper for you to buy our company than to start building this feature into your large product on your own.

There is nothing wrong with this. Even if this player does not agree, and usually nobody agrees the first time, you will get onto that large company's radar. They will start watching you and following your development. And after a while, it is quite possible that they will come back to you themselves, remind you of your offer and say: yes, we now see that your product has grown, it is strong and would fit organically into our large product. True, by then you may have grown and be worth more, and you will cost them more than the first time you made them the offer.

But such is life. The third scenario is extremely rare. It is not an acquisition but a merger of two equal startups into a single large product. I'll say right away that this really is rare, because founders are usually ambitious, charismatic leaders who do not like to share power, fame or money with other people. But in theory I allow for such a scenario. Let's say a restaurant table booking service and a restaurant food delivery service could well merge, create a large product of this kind and continue to grow together as one company, having agreed on the distribution of shares in the combined company and so on.

If they realize that it will be easier for them to grow and capture the market together than each on its own. And finally, the fourth scenario, which I always mention when talking about the fate of a startup, is bankruptcy, the liquidation of the company. This is not uncommon. As I always say, it happens in most startup cases. You need to be prepared for it. And you need to understand that the bankruptcy and liquidation of one startup is not yet the end of life. It is only the end of a certain stage in the founder's life. And after one failure, the founder can get back on their feet and launch a new startup. Moreover, they can fall again and get back up again, launch new startups and so on.

A startup founder who has gone through several bankruptcies is considered more valuable to investors, because they have tasted the bitterness of defeat, the bitterness of a fall, are resilient to stress and can get back on their feet. These are very good qualities that raise a startup founder's value in the eyes of an investor, and of the people around them in general.