Along and winding path leads from a mere idea to ultimate success. Part I discusses the issues which entrepreneurs and companies need to address in order to transform an interesting idea or project into a valuable company. It emphasizes the practical aspects of establishing and building a startup, on the basic assumptions that an interesting idea is insufficient for success and that the execution of the idea is no less (or even more) important than the idea itself. The financing aspects of startups will be discussed in detail in Part III.
Startups are companies whose assets are usually primarily intangible. Although these companies engage in a variety of businesses, their common denominator is their reliance on the power of ideas. This is the focal point of companies representing the new economy, an economy founded mainly on intellectual property. Regardless of the company's line of business be it biotechnology, Internet, communications, software, or otherwise the value of these companies depends mainly on the intangible assets they create. These assets comprise, primarily, the company's manpower or human resources, as well as work methods, business models, algorithms, and production processes created by such manpower or bought or hired by the startup from others. Aside from the creation of intangible assets, the value of the venture depends to a great extent on the protection afforded to such intangible assets and on their introduction into the market.
A startup company is born from an idea which constitutes a solution to a problem arising or anticipated in an existing or future market. The idea is formed and consolidated by entrepreneurs, financed by investors, supported by consultants, and executed by entrepreneurs and employees. Another characteristic of most startup companies is their focus on R&D. Finally, there comes the stage in which the fruit of the idea is reaped, and all the persons involved realize their investment, whether such investment was made in the form of human or financial capital.