START UP: ITALY VS USA
WHAT IS A STARTUP?
To begin with, let’s define what a startup is. The etymology of the English word already suggests its meaning. A startup refers to companies operating in an innovative field, in the early stages of their activity and launch.
The main characteristics for a company to be called a digital startup are:
1. Scalability
2. Replicability
3. Process or Product Innovation
4. Temporality
In particular, scalability in a startup refers to the ability to grow the business exponentially without a proportional increase in the resources invested or employed.
As for replicability, it refers to a business model that can be easily replicated, without major adjustments or changes, in any location.
Similarly, process or product innovation lies in introducing an idea or solution that addresses a need that has not yet been explored.
Temporariness refers to the initial phase of a company’s life cycle, which should eventually lead the business to become an established entity. Not by chance, well-known examples such as Airbnb, Netflix, or TikTok can no longer be considered startups today.
According to Steve Blank, considered the guru of Silicon Valley, there are six types of startups:
1. Lifestyle: le quali si fondano sullo sviluppo delle proprie passioni.
2. Family businesses: born to create a profit but have slower growth.
3. Scalable: that have goals of scale like those operating in Silicon Valley, with goals for rapid growth.
4. Aquitainable: the goal is to quickly sell the startup to other market players.
5. Social: whose goal is to make a difference and make the world a better place.
6. Large companies: these are large companies that have been operating on the market for years but need to innovate to keep up with the times.
But what is the difference between Italy vs USA?
In summary, the real difference lies in the approach and the fundamentally different mindset between the two countries. Americans are accustomed to a culture of risk and experimentation and are not afraid of failure. On the contrary, they see it as a learning opportunity from which value can be gained. Italy, on the other hand, bases its economy on small and medium-sized enterprises. This results in limited experimentation, longer production timelines, and a lower level of innovation in the digital field. Beyond cultural factors, which are decisive, there are also issues related to taxation, public investment at both state and regional levels, and a highly complex and lengthy bureaucratic system.
In the US, Steve Blank's general definition is applied, according to which a startup is a scalable and repeatable business model. In Italy, this definition is interchanged with the definition of a small business just starting up, but the two concepts as far as described so far are quite different. An SME, even if in the startup phase is intended to remain so over time, the startup on the other hand has different growth objectives.
The mandatory requirements for opening a startup in Italy:
1. established for less than 5 years
2. annual total value of production less than 5,000 million euros
3. headquartered in Italy or in a European Community country but with an office or branch in Italy
4. not to distribute profits
5. is not formed as a result of a corporate merger or division
6. does not have shares or stock in the capital stock on a regulated market
7. has as its goal the production and dissemination of a product or service with high innovative content
Additional requirements, for which at least one must be met:
1. expenditure on research and development must be 15% or more of the greater of annual sales and costs
2. the workforce must hold a doctoral or master's degree
3. have a patent in the innovative field
With regard to these considerations, if you are thinking of starting your own startup, consider well at what time and in what country is most convenient for you to kick off your venture.