Why are startups important?

The number of startups in Spain has increased considerably in recent years, around 20% from 2017 to 2018. According to the Startup Ecosystem Overview report from Mobile World Capital Barcelona, the organizer of the Mobile World Congress, there were 4,115 startups in the country at the end of 2018.

Let's remember that the startups they are young or newly created companies that have great possibilities for growth and scalability, and they usually have a high component technological. Nowadays it's common to hear about startups, but do you know why they're so important?

1. They lead innovation and generate disruptive changes in the business ecosystem

Las startups are characterized by being digital, Innovative, agile and prone to taking and managing risks. They maintain a close link with the technology, which allows entrepreneurs to develop new ideas and consolidate them in the market.

Startups are Agents of Change, are capable of transforming the environment and solving complex problems. They have in their hands the possibility of taking advantage of new technologies, creating value propositions linked to a business idea and reaching new audiences. Innovation, together with new technologies, such as the Internet of Things (IoT) or artificial intelligence, reinvents sectors and generates disruptive changes, as we can see in the insurance sector and the rise of Insurtech.

2. They promote new business models

What to offer to the market, how to do it, who will be the target audience, how to sell a product or service and what will be the method to generate income; that is what a business model. The models that work are capable of create value for the customer: they have a clear value proposition, differentiate themselves from the competition, establish strong ties with the customer and build customer loyalty.

Startups have a great capacity to keep up to date with market trends and contribute innovative solutions quickly, adapted to the changes that take place in society and to people's new consumption habits. In turn, they know the importance of the customer for your business and they maintain close and direct contact with it.

3. They promote the digital transformation of companies

Las traditional companies, who are mostly less permeable to change, know that from one day to the next competition can revolutionize the sector and, consequently, this has accelerated their digital transformation. This is where startups come into play: they are important sources of innovation for companies.

In this regard, the collaboration between startups and companies is increasingly common; both are united by a common goal, growth, and therefore they need each other to scale their business. Startups bring talent and transfer technology to companies, generate a positive impact on them and promote their scanning.

Being open to change is one of the keys to digital transformation, since today it occurs at great speed. This is another reason why startups are so valuable to traditional ones: they are agile, react to change quickly and manage risk well.

Although we have divided the article into three points, all of them are closely related to each other. In this ecosystem, startups, innovation, companies, digitalization and technology are part of a whole. So, to summarize, Why are startups important?

They are important because they are the protagonists of disruptive changes in the business ecosystem; because they lead innovation and bring it to large companies, promoting their digitalization; because they generate new business models, develop innovative solutions quickly and have the capacity to adapt to changes in the environment and society and create new products and services for the needs of today's customers.