Startup vs Small Business: The Real Difference


STARTUP VS SMALL BUSINESS

A startup is a new buzzword in the corporate world. Almost every entrepreneur who starts a new business calls his/her venture a startup.

But not every every business is a startup.

Many entrepreneurs realize later that their business was nothing but a small business from the very start.

This creates a confusion of what exactly is a startup and how is it different from a small business.

Fret not as here’s a complete guide explaining the difference between startup and a small business.


What is a Startup?

A startup is a business structure powered by disruptive innovation, created to solve a problem by delivering a new product or service under conditions of extreme uncertainty. For example – Headspace, Duolingo, etc.

Precisely, it’s a business structure that has the following characteristics –


  • Growth: Startup is a business structure designed to grow fast. According to Paul Graham, founder of Y Combinator, “A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.”
  • Business Model: Startups are known to have unconventional business models. This is because they venture into an untapped market or fulfil repressed demands of the market.
  • Innovation: The mark of a true startup is disruptive innovation. Startups create new offerings or innovate the existing ones. They might also disrupt the way an offering reaches to the consumer and develop a new market for themselves.
  • Uncertain Environment: Startups operate in a highly uncertain environment. The possibility of failure always hangs around an entrepreneur’s neck.

Any business structure that does not possess these four characteristics is not a startup.


What is a Small Business?

A small business is a privately owned corporation, partnership, or sole proprietorship that requires less capital, less workforce, and little to no machinery. These businesses operate on a small scale to serve a local community and generate less annual revenue than a large corporation. For example, local grocery stores, hair salons, car garages, cafes, etc

Usually, a small business possesses the following characteristics –

  • Limited Investment: Owners or a small group of individuals supply most of the capital requirements of the business. Since the scale of operations is small, the capital requirement is less.
  • Labor-Intensive: Small businesses usually don’t require heavy or sophisticated machinery. It uses more labour-intensive techniques.
  • Less Number of Employees: Small businesses employ a smaller number of employees as compared to large corporations. This is mainly due to their small scale of operations.
  • Local Area of Operations: Businesses like groceries shop, bakeries, or hair salons are all small businesses. They operate locally and remain there for longer periods of time (years or maybe decades), this helps the businesses to build a strong relationship with local customers.
  • Management: In most cases, the owner is also the manager of the business, which helps in quick decision making.


Startup vs Small Business

Small business don’t operate in an uncertain environment, have a traditional business model, and doesn’t grow at a substantial rate. They are just small business structures that have nothing special in them.

Startups, on the other hand, are special business structures that change the way the market, economy, or the world works.

Intent

The intention of the entrepreneur is where the distinction arises between small businesses and startups.

Startup Small Business
The intention behind a startup is to disrupt the market with a scalable and impactful business model. The sole intention of a small business’ owner is to be her/his own boss and secure a place in the local market.

Innovation

Startup Small Business
Innovation is an essential part of startups as they always create a new unique offering or innovate an existing one. Small businesses deal in offerings that already exist in the market.


Business Model

Startup Small Business
Startups usually have unconventional business models that are new to the market. This puts a startup in a high-risk position. Small businesses adopt a tried and tested business model which creates a less risky situation.

Growth Rate

Startup Small Business
Startups witness an exponential growth which is without any limits.The biggest example is Facebook. After its launch, it grew exponentially throughout the world. Small businesses grow slowly and steadily. Their purpose is to maintain a steady income; therefore, the growth rate stops after reaching a certain level of income.

Source of Funding

Startup Small Business
Startups go through various rounds of equity funding. Their sources are angel investors, venture capitalists, corporates, etc. Small businesses acquire funds only in the initial stages of the business. Once established, they are either revenue financed or take business loans. They don’t go through various rounds of equity funding like startups.


Revenue

Startup Small Business
A startup takes years to plan, collect funds, build a product, and execute. Therefore, it generates revenue in the later years. Small businesses make profits from the start since they operate on tried and tested business models, and provide offerings that already have a market.

Technology

Startup Small Business
Startups are often tech-oriented. Usually, startups use technology to disrupt the market. Small businesses use traditional methods or minimum use of technology. The technology used in these businesses tends to be simple.

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TC Sessions Mobility 2020 kicks off in two weeks

Holy cats, it’s less than two weeks until TC Sessions: Mobility 2020 kicks off for two program-packed days focused squarely on mobility and transportation technology. On October 6-7, thousands of people from around the world will gather virtually to talk trends, demo products, share insight and discover new opportunities to drive their business into the future.

Don’t have your pass yet? We offer different price levels to accommodate a range of budgets: General admission, group discounts, student discounts and our brand-new Expo Ticket — just $ 25. Want to showcase your startup in the expo? Buy an Early Stage Startup Exhibitor Package while you can. We have only a few spots left.

Don’t wait: buy your pass today. Prices increase on October 5.

Now that we have the housekeeping out of the way, let’s talk about what you can expect at TC Sessions: Mobility 2020.

We packed the event agenda with world-class speakers. You’ll hear from and engage with the industry’s top leaders and innovators across the mobility spectrum. Interested in electric vehicles? No one knows more about the batteries that fuel them than JB Straubel, co-founder and CEO of Redwood Materials and Celina Mikolajczak, vice president of battery technology for Panasonic Energy of North America. There’s a conversation you won’t want to miss.

Does Polestar have enough of what it takes to go head-to-head with Tesla? Get the 411 when Polestar CEO, Thomas Ingenlath joins us for a fireside chat about the company and the future of electric vehicles.

Nothing happens without funding, but are VC dollars enough to move the industry needle in the right direction? Investors Reilly Brennan, Amy Gu and Olaf Sakkers will debate the uncertain future of mobility technology.

You’ll find more than 40 early-stage startups (and even a few more established companies) holding forth in our expo. Whether you’re looking for new partners, potential customers, a baby unicorn for your portfolio, employment opportunities or simple inspiration, explore the expo and get your networking mojo running.

Love it or hate it, networking is essential to success. Take advantage of CrunchMatch, our free AI-powered platform. It’s the perfect tool for navigating a virtual conference. Answer a few quick questions when you register and CrunchMatch will search for and find attendees who align with your business goals. You can use it for random, free form searching, too. Schedule 1:1 video calls to talk shop, view product demos, pitch investors or impress potential employers.

We added a new event this year — Pitch Night. Ten early-stage startups will compete in front of a panel of VC judges on October 5, the night before Mobility 2020 officially opens. Five of those intrepid startups will earn the right to pitch from the main stage on October 6. Talk about a must-see throw-down.

So much to do in just two short days — we haven’t even talked about the breakout sessions. TC Sessions Mobility 2020 is right around the corner. Get excited, get focused and get ready to take advantage of every juicy opportunity. But first, get your pass — whatever flavor floats your autonomous boat — before the prices go up.

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility 2020? Contact our sponsorship sales team by filling out this form.

Startups – TechCrunch

Digital Addressing startup OKHi raises £1.4M with support from Angel Investment Network – TechRound

Digital Addressing startup OKHi raises £1.4M with support from Angel Investment Network  TechRound
“nigeria startups when:7d” – Google News

[CyberMDX in StreetInsider.com] Frost & Sullivan Recognizes CyberMDX as the Leader in Medical Devices and Assets Security Technology Innovation

According to the Frost & Sullivan report, “CyberMDX demonstrates thought leadership, technical excellence, and a unique customization ability to strengthen healthcare security through its platform. It also empowers the continuous discovery of medical devices and intelligent micro-segmentation policies and responses during cyberattacks.”

Read more here.

The post [CyberMDX in StreetInsider.com] Frost & Sullivan Recognizes CyberMDX as the Leader in Medical Devices and Assets Security Technology Innovation appeared first on OurCrowd Blog.

OurCrowd Blog

Startup vs Small Business: The Real Difference


STARTUP VS SMALL BUSINESS

A startup is a new buzzword in the corporate world. Almost every entrepreneur who starts a new business calls his/her venture a startup.

But not every every business is a startup.

Many entrepreneurs realize later that their business was nothing but a small business from the very start.

This creates a confusion of what exactly is a startup and how is it different from a small business.

Fret not as here’s a complete guide explaining the difference between startup and a small business.


What is a Startup?

A startup is a business structure powered by disruptive innovation, created to solve a problem by delivering a new product or service under conditions of extreme uncertainty. For example – Headspace, Duolingo, etc.

Precisely, it’s a business structure that has the following characteristics –


  • Growth: Startup is a business structure designed to grow fast. According to Paul Graham, founder of Y Combinator, “A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.”
  • Business Model: Startups are known to have unconventional business models. This is because they venture into an untapped market or fulfil repressed demands of the market.
  • Innovation: The mark of a true startup is disruptive innovation. Startups create new offerings or innovate the existing ones. They might also disrupt the way an offering reaches to the consumer and develop a new market for themselves.
  • Uncertain Environment: Startups operate in a highly uncertain environment. The possibility of failure always hangs around an entrepreneur’s neck.

Any business structure that does not possess these four characteristics is not a startup.


What is a Small Business?

A small business is a privately owned corporation, partnership, or sole proprietorship that requires less capital, less workforce, and little to no machinery. These businesses operate on a small scale to serve a local community and generate less annual revenue than a large corporation. For example, local grocery stores, hair salons, car garages, cafes, etc

Usually, a small business possesses the following characteristics –

  • Limited Investment: Owners or a small group of individuals supply most of the capital requirements of the business. Since the scale of operations is small, the capital requirement is less.
  • Labor-Intensive: Small businesses usually don’t require heavy or sophisticated machinery. It uses more labour-intensive techniques.
  • Less Number of Employees: Small businesses employ a smaller number of employees as compared to large corporations. This is mainly due to their small scale of operations.
  • Local Area of Operations: Businesses like groceries shop, bakeries, or hair salons are all small businesses. They operate locally and remain there for longer periods of time (years or maybe decades), this helps the businesses to build a strong relationship with local customers.
  • Management: In most cases, the owner is also the manager of the business, which helps in quick decision making.


Startup vs Small Business

Small business don’t operate in an uncertain environment, have a traditional business model, and doesn’t grow at a substantial rate. They are just small business structures that have nothing special in them.

Startups, on the other hand, are special business structures that change the way the market, economy, or the world works.

Intent

The intention of the entrepreneur is where the distinction arises between small businesses and startups.

Startup Small Business
The intention behind a startup is to disrupt the market with a scalable and impactful business model. The sole intention of a small business’ owner is to be her/his own boss and secure a place in the local market.

Innovation

Startup Small Business
Innovation is an essential part of startups as they always create a new unique offering or innovate an existing one. Small businesses deal in offerings that already exist in the market.


Business Model

Startup Small Business
Startups usually have unconventional business models that are new to the market. This puts a startup in a high-risk position. Small businesses adopt a tried and tested business model which creates a less risky situation.

Growth Rate

Startup Small Business
Startups witness an exponential growth which is without any limits.The biggest example is Facebook. After its launch, it grew exponentially throughout the world. Small businesses grow slowly and steadily. Their purpose is to maintain a steady income; therefore, the growth rate stops after reaching a certain level of income.

Source of Funding

Startup Small Business
Startups go through various rounds of equity funding. Their sources are angel investors, venture capitalists, corporates, etc. Small businesses acquire funds only in the initial stages of the business. Once established, they are either revenue financed or take business loans. They don’t go through various rounds of equity funding like startups.


Revenue

Startup Small Business
A startup takes years to plan, collect funds, build a product, and execute. Therefore, it generates revenue in the later years. Small businesses make profits from the start since they operate on tried and tested business models, and provide offerings that already have a market.

Technology

Startup Small Business
Startups are often tech-oriented. Usually, startups use technology to disrupt the market. Small businesses use traditional methods or minimum use of technology. The technology used in these businesses tends to be simple.

Go On, Tell Us What You Think!

Did we miss something?  Come on! Tell us what you think about our article on startup vs small business in the comments section.

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Fundraising lessons from David Rogier of MasterClass

Conventional wisdom says your company should be up and running and have some traction before you raise. But MasterClass co-founder David Rogier says entrepreneurs should try to raise funds before launching.

Before going live, David raised $ 6.4 million — $ 1.9 million in a seed round and $ 4.5 million in a Series A — for what would become MasterClass. To date, the company has raised six funding rounds and secured almost $ 240 million.

MasterClass’s first investment actually came from Michael Dearing, the founder of VC firm Harrison Metal and one of David’s business school professors. After graduating from Stanford University Graduate School of Business, David started working for Michael at the firm. About a year in, he quit to start his own company.

When David gave his notice, Michael told him he would invest just under $ 500,000, even though David didn’t have an idea yet.

“I was honored, I was thrilled and I was terrified, all within the span of 10 seconds,” David says. “It was an amazing gift, but I also felt an immense amount of pressure. I knew this was a once-in-a-lifetime chance, and I didn’t want to mess it up.”

He drew a blank for a year, but finally got inspiration from a story his grandmother told him when he was in second grade. In it, she stressed the importance of education, the one thing no one can ever take away from you. Upon remembering that lesson, David knew he wanted to give as many people as possible the opportunity to learn from the best, and MasterClass was born.

In an episode of How I Raised It, David shares some of his secrets to raising capital.

First money, then metrics

Securing funding before you even launch your company definitely isn’t a common practice. But David is adamant that you should attempt it.

“Your metrics out of the gate are never going to be great,” David says. “You need enough funds to have the time to actually improve them.” At the beginning, instead of relying on data, you should sell investors on your vision.

Of course, this is easier said than done. Many investors don’t want to give you a dime until you’ve proven your concept works. To overcome this barrier, David figured out what he could do to help minimize risk for investors.

Startups – TechCrunch

Mindful Leadership is the Formula for Success, Says This Business Strategist

I have seen the mantra of “People First, Always” work in organizations of all shapes and sizes. You could define the byproduct of this approach as engagement, but in “The Affinity Principle,” I extend the definition to include a natural liking, agreement and connectedness within the team that expands the concept of engagement into a state of Affinity! When your talent is supported, focused and engaged, Affinity thrives.


StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here

The following is excerpted from “The Affinity Principle: People First, Always” by Grant Gamble, Chapter 16 (August 2020).

Sweat, tears, vulnerability and authenticity

One of the greatest points of vulnerability in my career happened when my wife, Jana, and I were living in Brisbane, Australia. Our two young kids, Jack and Ellie, weren’t even in school yet and I was consulting with a large firm in the fitness space. An opportunity came up to purchase a small health club chain that included a large day spa and after much debate, we decided to go for it. We had spent a lot of time doing our due diligence and even though the business was losing a moderate amount of money every month, based on my experience and projections, I believed that we could turn it around fairly easily.

On our first day officially working in the business, we started answering the phones and there was call after call from frustrated members who had canceled their memberships months before and were still getting billed. It turned out that there were hundreds upon hundreds of members being billed that had asked for their membership to be canceled, often repeatedly and for months on end.

On paper, the business was losing a moderate amount, but in actuality when we canceled all these entrapped members, the business was losing a seemingly insurmountable amount of money every month.

We had budgeted for losses, but not at this cataclysmic level. This left us completely vulnerable.

It appeared that the general manager of this business had been holding these cancellations over because he was commissioned on the monthly billing income. The sellers claimed they had no idea about what was going on and were not prepared to accept any responsibility. When we spoke with our attorney, the advice we got was that we would need a lot more money than we had to battle this out in court, given the seller’s deep pockets.

Facing the harsh reality of do or die, we went to our team. We had come in with a lot of confidence in our ability to turn the ship around, but we now had to go to the team and tell them that we were unsure of our ability to navigate out of this mess. I explained that I would approach the landlords and appraise them of the situation and ask for some grace over the foreseeable future.

I mapped out our strategy, which involved a huge tightening of belts, curtailing some of the grandiose plans we had for the clubs, and my wife and I would be working an inordinate number of hours to fill the gaps. We also committed to doing a lot of the renovations and improvements that we felt were non-negotiable with our own hands.

The team took this news relatively well. We’d been very transparent with them from the outset and had given them no cause to doubt us to this point. We were incredibly vulnerable, and I believe they genuinely appreciated the predicament we all faced. They agreed to do their collective best to help us get the ship back on course.

We then had to go to the landlords and admit our financial vulnerability. After all of my assurances that we had a really strong strategy and the money to execute the plan, we were going back, cap in hand. Based on what I now knew, our cash reserves would be stripped dry in less than six months. I think the fact that I was completely transparent with them and incredibly vulnerable as a result, both landlords agreed to work with us… that was at least a start.

To cap all this off, the flagship club in the city underwent a rezoning of its free parking spaces, and what had been almost 170 free adjacent on-street parking spots suddenly became metered, charging high inner-city rates. Somehow, our landlord “forgot” to tell us this was happening when we took over the lease for the space. Some members simply quit, while most others had to question if they’d keep their memberships due to the high parking rates. We were down to 10 free parking spaces for members for the majority of the week.


Related: Strategies for Strengthening Your Business During the Pandemic

What ensued was the toughest 18 months of our lives.

We put in all of our liquid assets, sold our house and everything that wasn’t bolted down, I cashed in my retirement policy, we took out a second mortgage on our home back in the states that we couldn’t sell because of the 2008 crash, and now our mortgages exceeded the rent we were getting on that house. We subsisted on the minimum draw possible in order to put everything back into the business. We often went to the grocery store wondering if we’d have enough to pay for that week’s groceries.

Our kids, who at the time were 3 and 4 years old, spent a lot of time at the clubs while we worked, and Jana took on the majority of their care. On top of the financial, physical, and emotional stress, that took a tremendous toll.

Jana also took on marketing and taught herself graphic design. Her innate marketing gifts helped push the clubs in the right direction and in her spare time, she taught Pilates, worked in the day spa, on reception, painted walls at night and on the weekends, and took care of two little ones.

I was running constant defense trying to juggle the creditors, keep all stakeholders informed and intact, and squeeze every cent out of the operations. On weekends and during every spare minute, I donned the tool belt and did demolition work and rebuilt spaces to optimize our rentable space. We added kids’ amenities and rentable spaces and each little increment helped.

As we drew closer and closer to breaking even, it seemed harder and harder to cross that line. I would stare at the numbers almost trying to will them over the line. I took to going door-to-door to survey the market and canvas potential members. We spent every waking hour working on the clubs and in the clubs, but time was running out.

The landlords had been incredibly reasonable, but their patience was not without bounds. At this point, the team had not missed a paycheck, but we had asked a lot of them. They helped us with the kids, worked extra hours and gave their very best, even on the worst days. They had become family, but as such, they were in the inner circle and knew that we were fraying at the edges.

When things get this frayed, Affinity seems unattainable. We felt like we were swimming up a raging torrent, not flowing with the current. But at all points we remained open, honest, transparent and subsequently vulnerable.

We learned that Affinity can rise around you, even when you least think it possible.

In the end, I had to take a second job to cover our rent and groceries. We had completely run out of cash reserves. With me working a second full-time job and traveling overseas one week a month, that left the majority of responsibility for the clubs and the kids on my wife, who was exhausted and beyond frustrated with the predicament we found ourselves in. We were completely vulnerable emotionally, as well as financially.

Throughout this saga, we put it all on the table. Our hearts, our souls and literally everything we had to offer. We were completely vulnerable from day one until the day that we started to break even. Almost two years later, we ended up selling the businesses as profitable enterprises. By this time, we had accrued so much debt that we walked away completely empty-handed and exhausted, but our integrity was intact, and we were proud of what we had achieved in a relatively short period of time.

The lessons from this time are etched in my psyche and when we reflect on how we got through it all, we come to the conclusion that it was a lot of things, but most of all it was the Affinity we had created with our team and the frequent and transparent communication we had with our landlords, stakeholders and creditors.


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The genuine vulnerability that we had exhibited throughout these trials and tribulations had instilled trust and helped align the power of Affinity.

We had sought the team’s help, their counsel, their support, and received it in return. In large measure, I think it was because of the courage and honesty we displayed when we shared with them the predicament that we found ourselves in.

Jana and I look back on those days and marvel at the fact that we survived. And there is no doubt that the humanity of the situation, the shared experience we had with the team, created the Affinity I reference throughout this book.

“The Affinity Principle: People First, Always” is available now wherever books are sold and can be purchased via StartupNation.com.

The post Mindful Leadership is the Formula for Success, Says This Business Strategist appeared first on StartupNation.

StartupNation

How to start an Alcoholic drink brand?🤔

Hello StartUp community,

Does anybody have any advice/information on how to start your own Alcoholic drink brand?

Preferably for starting it in the UK.

Is there a way for someone else like a distillery to make it for you instead of doing it at home?

Cheers

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