What is a startup business vs small business? Also when does startup stop becoming a start up and just called a regular business? Is it time bound or revenue bound or size of business ?
The best definition I've heard of a startup is a business that doesn't know:<p><pre><code> 1. Who its customers are.
2. What it's selling.
3. How to make money.
</code></pre>
Aside from being punchy in its absurdity, it also explains other good startup definitions, eg. the Lean Startup's "A startup is a temporary organization designed to search for a repeatable and scalable business model" or Paul Graham's "A startup is a business designed to grow really fast." What is it searching for? The answers to those 3 questions. Why is it temporary? Because it runs out of money if it can't find the answers to these questions. What happens when it finds them? It grows really fast.<p>The other thing I like about this definition is that it emphasizes that startups are meant to fill a previously-undiscovered hole in the marketplace. Is a McDonalds franchise a startup? No - it knows exactly who its customers are, what it's selling, and how to make money. Is a niche e-commerce shop a startup? No - it knows exactly who its customers are, what it's selling, and how to make money. Was Facebook a startup? Yes - it was unclear what it was selling or how to make money when they started (they had a pretty good idea that their customers would be local advertisers, though). Was YCombinator? Yes - they knew who their customers were and how to make money, but hadn't quite nailed down what they were selling. Was VMWare? Yes - they knew what they were selling and how to make money, but weren't clear who their customers would be. Are these 3 companies startups <i>now</i>? No - they've found the answers to all 3 questions, and now have a scalable, repeatable business model. Businesses like Stripe and AirBnB are also not startups anymore, but arguably Uber still is, because they haven't yet figured out how to consistently make money.<p>And it makes clear what you should be doing when founding a startup (trying to find the answers to these 3 questions), why people choose not to found startups (if you don't find these answers, you've wasted millions of dollars and years of your life), when a company graduates into a regular business (when they've found answers to these 3 questions), why startups grow so quickly (because they're entering effectively virgin business territory, they can capture the whole market without resistance once they find a business model that works), why they often seem absurd to critics (because they are), and why the rewards are so high (because the risks are too).
Startup is a small giant, or a child giant.
They are defined by the market size.
Small businesses usually have a local market (street/city).
The startup market is global.