What’s the difference between a “startup” and just a new company?
In: Economics
If a job post says something like “start up feel” run. It means we’ve been in business a while but barely make a profit, so we’ll underpay you and expect work off the clock, but hey free coffee! Wooo!!!
If the product isn’t new and/or innovative it’s not a start up. Generally they have funding rounds and answer to investors with the founders making low to no salary.
Start-up is a smart therm for new business…
but let me give you an example, in my town there have just started a new bakery, that is something that already exists, therefore it is just a new company
But the guys running it does something new for a bakery in my town: only sourdough, originally only open weekend (this week was first time open on Wednesday also), opens at 10, close when sold out, and active social media… And they have big success, they are a start up, unlike if they just had make a traditional bakery with cakes, buns and bread, and open before 6 and open all day…
A startup is a tech company that doesn’t intend to make profit but making something new and sell itself to a larger company (who would take the new thing and make it a viable product).
Startup is a venture that intends to have exponential growth of revenue (eventually) to reward founders and early investors with 10-50x + returns of invested capital. Returns less than that don’t make much sense for early investors since the risk is not justified compared to other investments, and would likely be considered a small business which aim to produce a healthy return for owner and cover emoloyee salaries. Starups tend to be software companies since the profit margins and scalability are very high in a digital instead of physical product. They usually have to be disruptive, innovative ideas with a large addressable market.
Start up gets big moola, or funding.
Start ups can be new a company, but not all new companies are start ups.
Think of it this way, I’m giving you money so you can START UP this company.
ELI5:
Startups often refer to new businesses that are risking doing something very new.
New companies normally refers are new businesses doing something other businesses anyway do, but with slight changes.
Most of these comments are totally wrong.
A startup is a new company growing very fast.
That is it. It does not have to be a tech company (yes – you can sell cupcakes and be a startup), it does not need venture funding, and it does not have to even be innovative (though these things often help with growth). Good growth as I see it is 5-7% weekly in the first year, and 3-5x in the following years.
Paul graham explains it well: http://www.paulgraham.com/growth.html
I like [Steve Blank’s] (https://www.youtube.com/watch?v=ApjXY3Mh0xI&ab_channel=gigaom) definition of a startup – it is a business in search of a business model. Once it has product-market fit then it graduates into a grown-up.
The main difference is the possibility for rapid growth. That’s about it. Everything else other people are mentioning are sort of side effects.
There isn’t any exact line here, but generally speaking, if you want to start a new coffee shop, that coffee shop probably can’t grow 100% bigger every year, year over year, even under ideal conditions. Your shop can only fit so many customers before you have to get a bigger location or a second location, and that takes time to do. And once you have a second location, are you ready to double to 4 in the next year? double to 8? double to 16? Etc.. No, probably not.
A startup company in theory can. Startups don’t have to be tech companies, but being a tech company certainly makes it much easier to be able to grow that fast, because you’re just selling more software. Even a coffee shop could in theory do it this way, it would just have to have an innovative plan and start from the beginning with the plan for rapid growth and expansion. Most ppl starting a coffee shop don’t do it like this.
Startups exit the startup phase once they’ve squeezed all they can out of that “rapid growth” period.
I’m late, but the best explanation I’ve read for the difference between the two is here: http://paulgraham.com/growth.html
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