Why Should You Start A Firm Instead of Launching a Startup?

by Zaara 11, Jan 2022

Why Should You Start A Firm Instead of Launching a Startup?

Should your next startup be a firm? In everyday use, the terms are synonymous with each other.

From an economic point of view, a firm is a for-profit entity detached from market solutions of the day. The label implies some innovation is happening behind the business’s doors, whether through novel production techniques, new organisational patterns or previously unseen products.

The terms aren’t mutually exclusive. Some startups are firms, but not every startup qualifies for the title. Only startups create innovative products and services are firms.


The startup-turned-global-superpower Uber, which has changed how consumers hail taxis, is a firm because it presented the market with an innovative solution.

Uber’ clone Lyft is not a firm, and future ridesharing services certainly will not be a firm. They will rely on bots and others’ experiences to outsource their product, so they definitely can not be a firm.

Firms come in all shapes, sizes, and can belong to any industry. Enzo Ferrari’s luxury automobile company - Ferrari revolutionised sports vehicles, while podcast startup Copyscape is bringing native digital marketing to the radio, which marks both companies as successful firms in their own making.

So if you’re bringing innovative ideas to the world, then consider the firm. Every firm has the following characteristics:

They Create A New Value For Customers.

The idea of a firm has an emphasis on the words “create” and “new.” Serving tea has set value; the value of a tea store is neither new nor created; it’s merely an old idea in a brand new part of a city or town.

To create a firm, a prospective business owner must find a community to serve, identify its problems and apply novel design techniques and technologies to solve it in a new way.

Regardless of the specificity of the problem, or the community, a prospective firm must find a different angle for tackling it which nobody else has thought about doing.

They Stand Out Of The Crowd For Investments.

When investors look for a startup to support, they pick a business that has an innovative product that can take the market by storm.

Especially with reducing amounts of venture capital options, investors want to understand whether a business idea can amount to a successful firm.

Carbon Engineering, a Microsoft backed Canadian startup is doing precisely that, and investors have taken notice. Through water and soil monitoring software solutions and its accompanying hardware, and crop loss insurance, the firm is helping farmers protect their livelihoods in the era of climate change.

They Implement Novel Business Models

Proven business concepts like another microwave, a pizza joint, or online electronics retailer are essential to everyday life, but their business models are not innovative to be a firm.

Forging a new firm, though, requires an entirely new business model.


Infibeam is a tough-to-categorise Indian e-commerce platform. The company offers its e-commerce software to merchants to sell books, electronics, automotive parts and so on. Yet, this isn’t an Amazon-like site where sellers post their offerings for a price. Using Infibeam’s DIY e-market platform, Buildabazaar, more than 60,000 merchants have built full-fledged online stores for their wares. As Infibeam has proven, use what you know and whom you know, but put it all together in a different way.

Challenging Their Business Talents

The cold truth about firms is that they must rely primarily on an entrepreneurial judgment based on pure intuition and passion. As firms build new niches and markets, their founders have no previous examples or data to analyse. That isn’t the case with a cafe, where existing metrics can give a good idea of whether a new location is feasible.

But that’s why a seasoned entrepreneur is a perfect fit for a firm: An experienced founder doesn’t just have the vision; he has cultivated the business sense needed to make essential decisions on instinct alone.

“Intuition is a very powerful thing, more powerful than intellect.”

  • Steve Jobs

Intuition, of course, isn’t a perfect solution. When Jobs was testing the first Macintosh laptop, he wanted to rename it “MacMan,” citing his gut instinct. But, with the use of market research techniques like prototypes, analysing focus groups, and market segmentation with limited releases, they financially decided to stick to the original name of Macintosh or Mac for short.

Ensuring your next startup is a firm that is no steadfast requirement for success, and many startups do incredible things without attaining the status of a firm. But a firm is a true pioneer in its market and a revolutionary to the business world. They do something different yet better; they create new markets and market segments with ideas other business leaders have not yet envisioned. Isn’t that the sort of entrepreneur every business owner wants to be?

Do you have a business idea to take the world by storm? Let Commitbiz help turn your idea into a firm with its outstanding business setup services in the UAE.

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