What's the difference between a startup and a small business?

4 pointsbakhlawa14y ago3 comments

What makes a startup a startup? Does it have to be technology-related? If I start a small business selling widgets or a service, are the same elements not involved: some capital injection (from savings or family loans), one/two owners acting as CEO, CFO, CIO, Sales, Marketing, HR, Ops, etc., juggling many things and struggling with the same questions?

I am truly curious - what constitutes a startup and how is this different from the thousands of non-tech businesses that are started every day?

3 comments

pg14y ago

A startup is designed to grow rapidly. To do that it has to be a product company rather than a service company.

http://paulgraham.com/startupfunding.html (search for "physical")

AQR14y ago

My view: scale/size of market

A small business is going to be mainly local/regional. A car dealership is a small business - might make the owner(s) millions, but still a "small" business.

Car manufacturers like the new Tesla Motors are start ups.

There's plenty of start-ups that aren't tech based, but tech firms probably lend themselves to scaling thus the majority of them being start-ups.

Non tech example: Stonyfield Farm = start-up Farms an hour from me = small/medium businesses

malandrew14y ago

Small businesses are typically based on an established business model. Restaurants, bars, retail outlets, etc., count as small businesses.

Startups in contrast are an organization in search of a business model. Once it finds one it doubles down on the product search with a viable business model and develops it to profitability.

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