IT startup is a product that has a much larger market than any of the local businesses. It makes sense to create an IT startup if your potential market is larger than the audience of your neighborhood or city. Typically, the market here is measured by the size of the region, the country, or the world.
IT-startup does not necessarily have to bring in money right away: it can be unprofitable even within a few years. And this kind of arrangement is taken into account already at the stage of planning and designing the product. That is, the startup in this case is a real marathon. That is why its creators are in constant search for investments, so that the product has a chance to develop until the market evaluates its capitalization in a round sum.
This is a normal story for an IT startup, when you do it for a very long time, you don’t allow yourself to take money out of it, you get a relatively small salary as a founder, you work for the future, and suddenly three or four years later it turns out that your personal fortune is hundreds of millions of dollars. And that’s a very good way, a fairly common successful case study.
The conventional traditional business is much more pragmatic
It gets done faster. People who have launched more than one startup have authoritatively stated that the timeline for creating a product can vary from four months to several years. It is quite realistic to make a decent product in a year. At the same time, a classic business, in most cases, can be launched in a couple of months. Two or three months, and you already have something you can work with. And, most likely, you’re already making some money, you’re coming up with a planned payback. Whereas an IT startup is always much more uncertain than even a classic business.
If you are planning to launch some kind of IT solution, platform, application, whatever, you need to target the entire market of the country or even the world at once. Not in your own city, not in your own region, but on the biggest market possible. With this thought in mind, you must form your idea and start from it.
You must understand and gain competence specifically in IT. While almost any classic business is quite intuitive, and if you have a resource, you may not know much about it, or you may figure it out quickly, because many of its topics are quite simple. But if you use services startups, it becomes easier and clearer to launch a project.