Editing Startup company (section)

==Principles==
There are many principles in creating a startup. Some of the principles needed are listed below:

===Lean startup===
Lean startup is a clear set of principles to create and design startups under limited resources and tremendous uncertainty to build their ventures more flexibly and at a lower cost. It is based on the idea that entrepreneurs can make their implicit assumptions about how their venture works explicit and empirically testing it.<ref name=":5">{{Cite journal|date=1 November 2015|title=Self-regulated learning, team learning and project performance in entrepreneurship education: Learning in a lean startup environment|journal=Technological Forecasting and Social Change|language=en|volume=100|pages=21–28|doi=10.1016/j.techfore.2015.02.007|issn=0040-1625|last1=Harms|first1=Rainer|url=https://research.utwente.nl/en/publications/selfregulated-learning-team-learning-and-project-performance-in-entrepreneurship-education-learning-in-a-lean-startup-environment(b94a1ab9-6203-464d-a0a4-9a0650686b90).html}}</ref> The empirical test is to de/validate these assumptions and to get an engaged understanding of the business model of the new ventures, and in doing so, the new ventures are created iteratively in a build–measure–learn loop. Hence, lean startup is a set of principles for entrepreneurial learning and business model design. More precisely, it is a set of design principles aimed for iteratively experiential learning under uncertainty in an engaged empirical manner. Typically, a lean startup focuses on a few lean principles:

* find a problem worth solving, then define a solution
* engage early adopters for market validation
* continually test with smaller, faster iterations
* build a function, measure customer response, and verify/refute the idea
* evidence-based decisions on when to pivot by changing your plan's course
* maximize the efforts for speed, learning, and focus

===Market validation===
A key principle of startup is to validate the market need before providing a customer-centric product or service to avoid business ideas with weak demand.<ref>{{Cite web|title=5 STEPS TO VALIDATE YOUR BUSINESS IDEA|url=https://online.hbs.edu/blog/post/market-validation|access-date=6 June 2021|website=Harvard Business School online|date=18 August 2020|archive-date=6 June 2021|archive-url=https://web.archive.org/web/20210606122720/https://online.hbs.edu/blog/post/market-validation|url-status=live}}</ref> Market validation can be done in a number of ways, including surveys, cold calling, email responses, word of mouth or through sample research.<ref>{{Cite web |title=Homepage |url=https://www.startupindia.gov.in/content/sih/en/home-page.html |access-date=2022-03-01 |website=www.startupindia.gov.in |archive-date=2022-03-01 |archive-url=https://web.archive.org/web/20220301065632/https://www.startupindia.gov.in/content/sih/en/home-page.html |url-status=live }}</ref>

===Design thinking===
'''Design thinking''' is a human-centered approach to problem-solving that emphasizes empathy, collaboration, and experimentation. It is widely used to deeply understand customers' needs, behaviors, and pain points through immersive engagement and iterative feedback. By placing users at the center of the innovation process, design thinking seeks to uncover insights that can lead to more effective, relevant, and impactful solutions.

However, while design thinking—and its complementary methodology, '''customer development'''—aim to reduce assumptions and promote evidence-based innovation, they are '''not immune to cognitive biases'''. In fact, both processes can inadvertently reinforce existing biases at multiple stages. For instance, the way problems are framed, the '''sources of information''' selected, the '''questions posed during interviews''', and the '''interpretation of qualitative data''' can all be influenced by the facilitator’s or team’s preconceived notions.

These biases can subtly shape what is observed and how it is understood, potentially leading to solutions that reflect the designers' perspectives more than the users’. As a result, the promise of achieving "customer empathy" can be compromised if critical reflection and bias-checking mechanisms are not embedded throughout the process. Therefore, while design thinking is a powerful tool for innovation, its effectiveness depends heavily on the '''rigor, objectivity, and self-awareness''' of the individuals applying it..<ref>{{Cite journal|last1=York|first1=Jonathan L.|last2=Danes|first2=Jeffrey E.|date=22 May 2014|title=Customer Development, Innovation, and Decision-Making Biases in the Lean Startup|url=https://libjournals.mtsu.edu/index.php/jsbs/article/view/191|journal=Journal of Small Business Strategy|language=en|volume=24|issue=2|pages=21–40|issn=2380-1751|access-date=7 October 2018|archive-date=7 October 2018|archive-url=https://web.archive.org/web/20181007073801/https://libjournals.mtsu.edu/index.php/jsbs/article/view/191|url-status=live}}</ref> Encouraging people to consider the opposite of whatever decision they are about to make tends to reduce biases such as overconfidence, the [[hindsight bias]], and anchoring.<ref>{{Cite journal |last=Larrick |first=R.P. |date=2004 |title=Debiasing |url=https://psycnet.apa.org/record/2004-19929-016 |journal=Blackwell Handbook of Judgment and Decision Making}}</ref><ref>{{Cite journal |last1=Mussweiler |first1=T. |last2=Strack |first2=F. |last3=Pfeiffer |first3=T. |date=2000 |title=Overcoming the inevitable anchoring effect: Considering the opposite compensates for selective accessibility. |url=https://psycnet.apa.org/record/2001-00923-010 |journal=Personality and Social Psychology Bulletin}}</ref>

===Decision-making under uncertainty===
In startups, many decisions are made under uncertainty,<ref name=":4"/> and hence a key principle for startups is to be agile and flexible. Founders can embed options to design startups in flexible manners, so that the startups can change easily in future.

Uncertainty can vary within-person (I feel more uncertain this year than last year) and between-person (he feels more uncertain than she does). A study found that when entrepreneurs feel more uncertain, they identify more opportunities (within-person difference), but entrepreneurs who perceive more uncertainties than others do not identify more opportunities than others do (no between-person difference).<ref name=":4"/>

===Partnering===
Startups may form partnerships with other firms to enable their business model to operate.<ref>{{cite journal|last1=Teece|first1=David J.|year=2010|title=Business Models, Business Strategy and Innovation|journal=Long Range Planning|volume=43|issue=2–3|pages=172–194|doi=10.1016/j.lrp.2009.07.003|s2cid=154362245 }}</ref> To become attractive to other businesses, startups need to align their internal features, such as management style and products with the market situation. In their 2013 study, Kask and Linton develop two ideal profiles, or also known as configurations or archetypes, for startups that are commercializing inventions. The ''inheritor'' profile calls for a management style that is not too entrepreneurial (more conservative) and the startup should have an incremental invention (building on a previous standard). This profile is set out to be more successful (in finding a business partner) in a market with a dominant design (a clear standard is applied in this market). In contrast to this, profile is the ''originator'' which has a management style that is highly entrepreneurial and in which a radical invention or a [[disruptive innovation]] (totally new standard) is being developed. This profile is set out to be more successful (in finding a business partner) in a market that does not have a dominant design (established standard). New startups should align themselves to one of the profiles when commercializing an invention to be able to find and be attractive to a business partner. By finding a business partner, a startup has greater chances of success.<ref>{{cite journal|last1=Kask|first1=Johan|last2=Linton|first2=Gabriel|year=2013|title=Business mating: When start ups get it right|url=http://oru.diva-portal.org/smash/get/diva2:705449/FULLTEXT01|journal=Journal of Small Business & Entrepreneurship|volume=26|issue=5|pages=511|doi=10.1080/08276331.2013.876765|s2cid=168158914|access-date=2017-11-01|archive-date=2017-11-09|archive-url=https://web.archive.org/web/20171109113248/http://oru.diva-portal.org/smash/get/diva2:705449/FULLTEXT01|url-status=live}}</ref>

Startups usually need many different partners to realize their business idea. The commercialization process is often a bumpy road with iterations and new insights during the process. Hasche and Linton<ref name=":3">{{Cite journal|last1=Hasche|first1=Nina|last2=Linton|first2=Gabriel|date=December 2017|title=The value of failed relationships for the development of a Medtech start up|journal=Journal of Small Business & Entrepreneurship|language=en|volume=30|issue=1|pages=97–119|doi=10.1080/08276331.2017.1388953|s2cid=168885012|issn=0827-6331}}</ref> argue that startups can learn from their relationships with other firms, and even if the relationship ends, the startup will have gained valuable knowledge about how it should move on going forward. When a relationship is failing for a startup it needs to make changes. Three types of changes can be identified according to Hasche and Linton:<ref name=":3" />

* Change of business concept for the start up
* Change of collaboration constellation (change several relationships)
* Change of characteristic of business relationship (with the partner, e.g. from a transactional relationship to more of a collaborative type of relationship)

===Entrepreneurial learning===
{{See also|Validated learning}}
Startups need to learn at a huge speed before running out of resources. Proactive actions (experimentation, searching, etc.) enhance a founder's learning to start a company.<ref>{{Cite journal|last=Castrogiovanni|first=Gary J.|date=1 December 1996|title=Pre-Startup Planning and the Survival of New Small Businesses: Theoretical Linkages|journal=Journal of Management|language=en|volume=22|issue=6|pages=801–822|doi=10.1177/014920639602200601|s2cid=220594531|issn=0149-2063}}</ref> To learn effectively, founders often formulate [[Falsifiability|falsifiable]] [[Hypothesis|hypotheses]], build a minimum viable product (MVP), and conduct [[A/B testing]].

===Business model design===
With the key learnings from market validation, design thinking, and lean startup, founders can design a business model. However it is important not to dive into business models too early before there is sufficient learning on market validation. [[Paul Graham (programmer)|Paul Graham]] said: "What I tell founders is not to sweat the business model too much at first. The most important task at first is to build something people want. If you don't do that, it won't matter how clever your business model is."<ref>{{Cite news|url=https://techcrunch.com/2006/09/02/an-interview-with-vc-paul-graham-of-ycombinator/|title=An interview with investor Paul Graham of Y Combinator|work=TechCrunch|access-date=1 October 2018|language=en-US|archive-date=2 February 2019|archive-url=https://web.archive.org/web/20190202235511/https://techcrunch.com/2006/09/02/an-interview-with-vc-paul-graham-of-ycombinator/|url-status=live}}</ref>