The history of startup business has rich and colorful nuances and a pattern of continuous and exponential growth. Although the definition of what a startup is has changed over the years, all companies were once a startup. Companies such as Edison General Electric and later Coca-Cola or Nokia would have all been considered startup businesses in their early days.
Entrepreneurs are now huddled in startup hubs that offer a wide variety of opportunities, technology, and knowledge to help those most determined to succeed. To get a clear image of how the startup industry has evolved since Edison's time, we'll first need to talk about the father of all startup hubs: Silicon Valley.
The Ascension of Silicon Valley
Silicon Valley has been leaving a mark on technological advancements since the 1970s. Although not technically a startup hub, as we would name it today, California’s San Francisco Bay Area gathered some of the brightest minds around Stanford University in California. Business giants like Google, Facebook, and Apple all got their start here.
The Electronic News magazine first coined the term Silicon Valley in a 1971 publication. The reason behind this term was that most companies in the area at the time were building and selling semiconductors with silicone as their main component.
By the mid-1980s Palo Alto, Mountain View, Cupertino, and Sunnyvale were all considered part of Silicon Valley. Due mainly to the dot-com boom of the late 1990s, Silicon Valley became known as the tech hub of the world and many giants emerged from the area.
Following in Stanford University's footsteps, other universities around the world began investing in startup hubs and business incubators. Student startups are still trending and many student-entrepreneurs contribute to their country's economy by raising ideas to the status of startups.
Over the last decade Legacy Ventures has been designed dozens of high impact immersive innovation, digital and entrepreneurial experiences in Silicon Valley. This has without a doubt been the most popular and most in demand global start-up and innovation hotspot in the world for our partners.
What Is a Startup Hub?
A startup hub is a place where business ideas can flourish into full-fledged companies. Universities like The Massachusetts Institute of Technology, Harvard University, and University of California, Berkeley, were among the first higher education schools to offer startup hubs and business incubators.
Furthermore, a startup initiative needs to have all the qualities of a scalable business, the team should be committed to success, and regardless of the industry, the startup will need to make good use of the latest technology.
For a student idea to be considered a startup, it needs to have:
1. A growth focus
The main aim of a startup is growth. Unlike some small businesses out there, a team of students with a startup idea should be looking to implement a continuous growth strategy.
This means that the company will be on track for expansion and not limited by a more traditional business model that can function for years with the same revenue and the same clients. Student entrepreneurs rely on startup hubs, crowdfunding, angel investors, and business accelerators to fund their business idea.
Whatever services or products your business offers your customers, you'll need to be aware that paying back investors will take some time. Proper business and marketing planning will help better predict a timeframe for paying off borrowed capital.
Depending on your payback sum, it can take a year or more to turn the business from paying back debt to producing profit. Once your business begins to make money, you'll want to consider forming strategic partnerships, acquiring other startups, and securing additional funding to ensure you're staying on the right growth trajectory.
2. A spotlight on innovation
Today's startup hubs solve existing problems by finding new solutions. They acquire or manufacture new products, offer new services, and gain funding from new sources.
3. Use the latest tech
Although most startups of the last few decades have thrived on using the newest technology available, not all startups need to be knee-deep in tech to succeed. Still, smart startups work with technology even if they do not necessarily invent new software or manufacture new tech products.
4. More than one employee
As an entrepreneur, you can certainly start a business on your own. But, to grow, you'll need a carefully selected team that supports the business and believes in its success.
5. Maximum 500 employees
Most startups will hire somewhere around 5 employees when they are in the beginning stages of building the business. As you grow, it will become increasingly evident that hiring the right people at the right time is crucial to the survival and continuous growth of your business.
Once you hit the 500-employee mark, it will be safe to say you are no longer considered a startup company. Until that happens, ensure that each member of your team is passionate about their role and create a work environment that allows each of them to advance professionally, as well as personally.
Universities Offer the Best Startup Hubs
In the last few years, universities in every major city in the world have started realizing that startup hubs are good for business, for the economy, and for student entrepreneurs. As such, they have started offering a sounding board for students to build businesses directly related to their research area, as well as incubators to increase the likelihood of success.
In fact, it’s estimated that a new business is born every 2 hours in UK universities alone.
And, in 2018, student startups in the UK were generating an income of £1 billion. This is a significant increase when compared to the £913 million in 2016.
According to Creator Fund, students have not been deterred by the ongoing pandemic, and are using the downtime to chisel their business ideas. More students than ever before are becoming entrepreneurs, and more are building the foundations for the business giants of the future.
CEO of the National Association of College and Universities Entrepreneurs, Holly Knower was quoted saying: "We’ve found that recent postgraduates are looking for more creative and innovative ways to make their mark within their chosen disciplines, and this includes starting their own business".
In her interview with The Guardian, she added: "The current labor market is not what it once was and therefore we will see a reduced number of young people fulfilling long-term careers in one dedicated role; instead they’ll be making their own dream careers by starting up their own companies".
One major reason why universities can offer the best startup hubs to student entrepreneurs is the vast resources each university can offer. Higher education schools invest in their students and in turn help their bottom line as well as the country's economy.
The Benefits of Joining a College or University Startup Hub
As mentioned, higher education schools dispose of the funds, tech, and knowledge resources that a student entrepreneur needs to start their business.
Stanford University is at the top of the list for innovative, wealth generating, and most sought-after startup hubs. The university's undergraduate programs have generated the most entrepreneurs, most companies, and an impressive range of accelerators for would-be founders to apply to.
Colleges and universities are also the perfect breeding ground for connections and networking. If you're looking for investors, partners, or supporters you'll find it easier to secure major stakeholders for your business by taking advantage of your university's far-reaching influence.
The Massachusetts Institute of Technology (MIT) is one of the most renowned startup generators with over 1000 startups funded between 2006 and 2020. Their Martin Trust Center for MIT Entrepreneurship offers startup accelerators, training and advisors, as well as an entrepreneurship competition with $100,000 in prizes.
In the UK, University of Oxford, Warwick Business School, and University of Cambridge are among the top schools to offer support to their student entrepreneurs. Sure, not all of us can go to Harvard or Oxford, but more accessible colleges and universities around the world are starting to invest in their student entrepreneurs too.
Legacy Ventures has built a network of startup and innovation hubs in over 15 cities around the world from Silicon Valley to Beijing, Berlin to Cape Town. All our programs explore the latest technology trends and the digital economy, provide high level immersions with some of the world’s most forward thinking companies and include discussions and fire side chats with some of the brightest minds. Finally, all our programs include meaningful interactions with the Universities that sit at the heart of these eco-systems. Join us in discovering the next generation of disruptors. Lead. Learn. Inspire!