Editing Startup company (section)

==Actions==
Startups typically begin by a founder (solo-founder) or co-founders who have a way to solve a problem. The founder of a startup will do the market validation by problem interview, solution interview, and building a [[minimum viable product]] (MVP), i.e. a [[prototype]], to develop and validate their business models.<ref>{{cite web |url=https://www.startups.com/articles/startup-founders-and-cofounders |title=Startup Founders and Cofounders |website=Startups.com |access-date=2025-01-02}}</ref> The startup process can take a long period of time; hence, sustaining effort is required. Over the long term, sustaining effort is especially challenging because of the high failure rates and uncertain outcomes.<ref>{{Cite journal|date=1 May 2015|title=Perceived progress variability and entrepreneurial effort intensity: The moderating role of venture goal commitment|journal=Journal of Business Venturing|language=en|volume=30|issue=3|pages=375–389|doi=10.1016/j.jbusvent.2014.02.001|issn=0883-9026|last1=Uy|first1=Marilyn A.|last2=Foo|first2=Maw-Der|last3=Ilies|first3=Remus|hdl=10220/19076 |s2cid=145206425 |hdl-access=free}}</ref> Having a business plan in place outlines what to do and how to plan and achieve an idea in the future. Typically, these plans outline the first three to five years of your business strategy.<ref>{{Cite web|last=Kronenberger|first=Craig|date=2021-02-23|title=How the Startup Studio Business Model Is Changing the Startup Economy as We Know It|url=https://medium.com/startup-studio-insider/how-the-startup-studio-business-model-is-changing-the-startup-economy-as-we-know-it-4a121a670007|access-date=2021-06-08|website=Medium|language=en|archive-date=2021-04-28|archive-url=https://web.archive.org/web/20210428001951/https://medium.com/startup-studio-insider/how-the-startup-studio-business-model-is-changing-the-startup-economy-as-we-know-it-4a121a670007|url-status=live}}</ref>

===Design principles===
Models behind startups presenting as ventures are usually associated with [[design science]]. Design science uses design principles considered to be a coherent set of normative ideas and propositions to design and construct the company's backbone.<ref>{{Cite journal|last1=van Burg|first1=Elco|last2=Romme|first2=A. Georges L.|last3=Gilsing|first3=Victor A.|last4=Reymen|first4=Isabelle M. M. J.|date=March 2008|title=Creating University Spin-Offs: A Science-Based Design Perspective|journal=Journal of Product Innovation Management|language=en|volume=25|issue=2|pages=114–128|doi=10.1111/j.1540-5885.2008.00291.x|issn=0737-6782|hdl=1871/23732|s2cid=19769095 |url=https://research.tilburguniversity.edu/en/publications/ed13609d-fde4-43dc-ba8a-d2e602b79efc}}</ref> For example, one of the initial design principles is affordable loss.<ref>{{Cite journal|last1=Sarasvathy|first1=Saras D.|last2=Dew|first2=Nicholas|last3=Read|first3=Stuart|last4=Wiltbank|first4=Robert|date=1 March 2008|title=Designing Organizations that Design Environments: Lessons from Entrepreneurial Expertise|journal=Organization Studies|language=en|volume=29|issue=3|pages=331–350|doi=10.1177/0170840607088017|issn=0170-8406|hdl=10945/41241|s2cid=145726834|hdl-access=free}}</ref>

===Heuristics and biases in startup actions ===
Because of the lack of information, high uncertainty, and the need to make decisions quickly, founders usually use many [[heuristic]]s and exhibit [[List of cognitive biases|biases]] in their leadership decisions.<ref name=":1">{{Cite journal|last1=Zhang|first1=Stephen X.|last2=Cueto|first2=Javier|date=9 November 2015|title=The Study of Bias in Entrepreneurship|journal=Entrepreneurship Theory and Practice|language=en|volume=41|issue=3|pages=419–454|doi=10.1111/etap.12212|s2cid=146617323|issn=1042-2587|url=http://psyarxiv.com/76rkv/|access-date=21 November 2020|archive-date=17 November 2021|archive-url=https://web.archive.org/web/20211117064745/https://psyarxiv.com/76rkv/|url-status=live}}</ref>

Entrepreneurs often become overconfident about their startups and their influence on an outcome (case of ''the illusion of control''). Below are some of the most critical decision biases of entrepreneurs to start up a new business.<ref name=":1" />

# '''[[Overconfidence effect|Overconfidence]]:''' Perceive a subjective certainty higher than the objective accuracy.The gap often leads individuals to overestimate their understanding of complex situations, resulting in decisions that are based more on subjective certainty than on objective facts or accurate information
# '''[[Illusion of control]]:''' Overemphasize how much skills, instead of chance, improve performance.
# '''The [[Hasty generalization|law of small numbers]]:''' Reach conclusions about a larger population using a limited sample.
# '''[[Availability bias]]:''' Make judgments about the probability of events based on how easy it is to think of examples.
# '''[[Escalation of commitment]]:''' Persist unduly with unsuccessful initiatives or courses of action.

Startups use several action principles to generate evidence as quickly as possible to reduce the downside effect of decision biases such as an escalation of commitment, overconfidence, and the illusion of control.

===Mentoring===
Many entrepreneurs seek feedback from [[Mentorship|mentors]] in creating their startups. Mentors guide founders and impart entrepreneurial skills and may increase the [[self-efficacy]] of nascent entrepreneurs.<ref>{{Cite journal|last1=Ho|first1=Moon-Ho Ringo|last2=Uy|first2=Marilyn A.|last3=Kang|first3=Bianca N. Y.|last4=Chan|first4=Kim-Yin|date=2018|title=Impact of Entrepreneurship Training on Entrepreneurial Efficacy and Alertness among Adolescent Youth|journal=Frontiers in Education|language=en|volume=3|doi=10.3389/feduc.2018.00013|issn=2504-284X|doi-access=free|hdl=10356/144934|hdl-access=free}}</ref> Mentoring offers direction for entrepreneurs to enhance their knowledge of how to sustain their assets relating to their status and identity and strengthen their real-time skills.<ref>{{cite book |last1=Jaško |first1=Ondrej |last2=Marinković |first2=Sanja |title=Symposium proceedings - XV International symposium Symorg 2016: Reshaping ... |page=1462 |url=https://books.google.com/books?id=5TkLDgAAQBAJ&q=importance+of+mentoring+for+Start+ups&pg=PA1462|isbn=9788676803262 |date=3 June 2016 |publisher=University of Belgrade, Faculty of Organizational Sciences }}</ref>