Startup vs Small Business. What’s the difference? - Startups 101
(00:00:00) Introduction to Startups vs. Small Businesses
- Not all businesses are designed to become multi-billion dollar enterprises like Airbnb or Slack.
- Most businesses will not be the next Amazon, Facebook, or Twitter, nor will they raise significant venture capital.
- There's a distinction between Silicon Valley-type startups (possibly becoming unicorns) and more modest small businesses.
- Many small businesses incorrectly try to emulate the VC-funded growth model.
- The term 'startup' can apply to both groups, but for clarity, the video differentiates them as distinct categories.
(00:00:00) Slidebean's Experience
- Slidebean began with ambitions to disrupt the presentation software market and to challenge PowerPoint.
- Despite not becoming the market leader they hoped to be, Slidebean considers its multi-million-dollar revenue a success.
- The experience suggests that founders should be realistic about their company's category and growth trajectory.
(00:00:00) Characteristics that Define Business Types
- Service-based businesses with human employees likely won't scale as fast as tech startups and fit more into the small business category.
- Businesses with software that can be used by millions without proportionally increasing staff might lean towards the startup category.
- Understanding the potential market size is crucial to align with the type of business you're building.
(00:00:00) Fundraising and Investors
- Startup investors expect a 10x return and generally prefer exits via a business sale or IPO to recoup their investment quickly.
- Knowing your business category is critical to avoid wasting time with the wrong type of investors.
- Friends and family funding may be suitable for businesses that don't fit the high-growth startup model.
(00:00:00) Co-founders and Business Growth
- Having an executive co-founder with capital and a network may suit service companies better than pursuing startup investors.
- It's possible to raise modest funds from personal connections for smaller ventures.
- Mismatched growth expectations can lead to dissatisfaction among investors and pressure on the business.
(00:00:00) Conclusion and Final Thoughts
- Choose a business path you love, as it will consume a significant part of your life.
- The reputation and identity you build with your business may stay with you indefinitely.
- Slidebean offers a free product trial and availability of founder office hours for subscribers.
- First 25 sign-ups receive a free 3-month period on the Slidebean platform.
- Existing subscribers can access free office hours with the team.
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