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Business Designing

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Autor:   •  April 14, 2018  •  Essay  •  875 Words (4 Pages)  •  13 Views

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  As an important part of economy, high-growth firms are emerging and growing successfully to create job position and change the economic environment. At the same time, Large companies also play an important role of the economy. But there are many difference between high growth firms and current established companies, So the overall economy should be divide in two categories: Economy 1 and Economy 2. Economy 1 consist of established companies and incumbents in the markets and Economy 2 mainly create different types of new firms as their outcome.

  In Economy 2, the growing process of startups or high-growth firms are related to other actors in the environment. Actors include venture capitalist, suppliers, markets, employees and so on. They consist of a complex ecosystem that affect the firm’s growth. As environment is evolving moment by moment, the growth of the whole ecosystem and the environment should be observed when doing research on the process of high-growth firm. There are also some other barriers to hinder a firm’s growth. The barriers include disadvantageous policy, lack of capital, market failure, these are all related to main actors in the ecosystem. As a result, using a systemic view is very important since there are so many factors in the process of a startup’s growth.

 

  Besides startups, other actors are included in the startup industry structure. Customers’ command is always what firms always manage to meet. Investors combines specific economics and organizational and technical problems. Innovators provide ideas new technologies that assumed to have economic potential. The main character of the whole system is entrepreneurs who select innovations. bring it to market and the enlarge the scale of the firm. Moreover, venture capitalists make investments and make final commercialization of the startup. And then, industrialists scale the product and innovations to large-scale production and distribution. Finally, skilled labors are involved in the growth to support the daily running of a firm.

  The aim of a startup industry is to minimize the incidence of two errors in economy resource allocation: Bad projects and startups are kept alive too long, and winners are rejected or terminated prematurely. Sometimes it is hard to evaluate whether a firm is bad or not and it is also difficult to forecast. As capital markets growing, winners much more chances than before to get funding, but the problem still exist. Making the mistake cause value loss for firm and capitalist because the potential winner may not be scaled for maximal value. And if the potential winner is rejected, it is a loss for the capitalist who reject the entrepreneur, it also costs to find another business angle or venture capitalist and may miss the best time of commercialize the innovation.

  The startup industry aims to generate the potential winners and deal flow, after that, there are stages to pick and scaling the winners. The generation of potential winners requires actors work in different stages to generate a high-growth firm. Firstly, the innovators come up with new ideas of new technology that has potential and is profitable. Then it is selected by the entrepreneurs to commercialize it. The aim of an entrepreneur is not only to make it to the market but enlarge the scale of the business. After that, venture capitalists fund the startups s to run the business. Since not all the project get funding, venture capitalist only make investment on what they think is going to be a potential winner. Form this aspect VCs do the filtering of startups. After being funded, the project is finally commercialized. Startups need skilled labors to support the firm, it is crucial for staying in the game and scaling. Also, access to professional service and business mentoring is very important for the firm to keep growing.

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