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A Start-Up or a Small Business - How Do You Define the Difference?

LauraCiocia'sLauraCiocia·Feb 09, 2021
Posted in:Tech
Hi Elphas!I see these terms used interchangeably while I know others draw clear distinctions. For example, Steve Blank distinguishes start-up founders as people who want to "take over the universe" (https://www.youtube.com/watch?v=xhnBYdJ2fK8&t=41s). Their ambition from the very beginning is to build something that has major scale potential. But merely using a founder's intention as the qualifier for a particular business designation seems short-sighted. Especially given how few businesses actually manage to "take over the universe" (whatever that actually means).There's also the argument that in order to qualify as a start-up, you need to be technology/software focused. But what is you are technology enabled - that would open up the doors to a much broader swath of businesses it seems.Others base the distinction on funding sources - if you are VC-funded or pursuing VC funding, you are by default, a start-up and not a small business. I'm curious how the Elpha community defines these terms differently and if you think perhaps we need another category of business that sits somewhere in between.
tracyphillips'sTracy·Feb 09, 2021
Personally, I think of startups as companies that are destined to grow larger by either being acquired or via IPO. They may be small now but they won’t be forever (at least, that’s the plan). Small business are designed and planned to stay small. These could be local, as opposed to global. They could be an agency. They are often privately owned and/or operated. Some companies fall into both, especially nascent startups or bootstrapped startups!I am curious to hear what others think ☺️
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