Ask HN: What's the difference between a Startup and a Small Business?

The difference between a shrub and a redwood seedling. A startup is a company that is just passing through small.

I believe Paul Graham once defined the difference as: a startup wants to (but doesn't necessarily) have "a significant exit," it either goes public, or gets acquired for a large amount. A new small business that aims to be sustainable, profitable, grow, etc, isn't a "startup," without the significant exit. Unfortunately I remember hearing this in a video or audio interview, so it's hard for me to search for this attribution.

the term startup tends to refer to growth-oriented new businesses. they can be small businesses, but they're small businesses actively trying to become not small.

A startup is a small business that has recently started up (duh), especially in a technology sector, that is capable of scaling into something big.

Some examples of small businesses that aren't startups might help clarify the issue. When I visited a local small business advisory centre (in the hope of learn something to help my startup, before I understood this difference) the other founders who I met were selling (purportedly) gourmet dog food and therapeutic massage. Most small businesses are like that: providing goods or services to localities. Tradesmen, delis etc are other examples.

I would argue startups are a specific subset of businesses that initially are "Small Businesses" with the defining quality being the capability to scale to something much larger, obviously when faced with a market opportunity that allows it do so (whether that market is existing or is completely new).<p>Of course, the "term" startup is often used loosely but most often is used to define the usual: Tech-oriented, "innovative" businesses seeking to raise millions of dollars and eventually become companies that can make hundreds of millions of dollars (or billions) and can make the large exit (as PG pointed out above).

<a href="http://www.pchristensen.com/blog/articles/hacker-vs-engineer-know-the-difference/" rel="nofollow">http://www.pchristensen.com/blog/articles/hacker-vs-engineer...</a>

There is no difference<p>If you think your startup isn't a (big or small) business - you are missing the point.

A startup is legitimately an investable opportunity for a professional investor. (Just because 37signals doesn't want money, doesn't mean that they're not a good candidate for a VC investment.)

A small business is making money... :o)

The difference often manifests itself like this: startups make something people want; small businesses make something people want to pay for.

Startups grow for the sake of growing.