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Comment by vsloo | Hacker News Reader

There's a disconnect between founders who want to build a startup and founders who want to build a business. They think the two are the same but they're really not and this study clearly shows that. There are situations where startups turn into businesses but I'd rather build a profitable business for myself from the start and our team than to build a startup purely focused on "growth".

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I am very disconnected from the "startup" world, and something in your comment has me asking: What is the difference between a startup and a business? To me, they ought to be one in the same...

Paul Graham (and Y Combinator I guess) believe that the difference is the goals.

A startup is a company designed to grow fast. PG, 2012

http://www.paulgraham.com/growth.html

http://www.forbes.com/sites/natalierobehmed/2013/12/16/what-...

a startup is a company designed to scale very quickly

Steve Blank believes a startup is determined by the search of a business model. If you have a business model, then you have a small or new company, not a startup.

https://steveblank.com/2014/03/04/why-companies-are-not-star...

Quite right.

Another distinction worth making, almost its own axis really, is the difference between "a tech business" and "a business that uses tech".

Companies like Cisco, Facebook, Apple, Google, Canonical, and so forth are companies that are tech companies--without their technology, they wouldn't be in business at all. They provide a service or product that is IP in its own right.

Companies like Chipotle, Subway, Uber, Lyft, AirBNB, DoorDash, Dollar Shave Club, and so forth are companies that use tech to achieve economies of scale and growth that wouldn't be as easy otherwise but could still be done. You can imagine a way of making something that to the user is substantially like the Uber today without a complicated backend, even just using call centers and massive dispatch. The key part of their business is part-time contractor drivers, which is a business and not tech innovation.

It's easy to assume that all startups are tech startups, but that's not quite true and it also can limit and slow developing a good business model.

But then, can't you make the same analogy for early stage Google--basically, a big marketing firm that manually places ads in the yellow pages? Similarly, Facebook can also be executed over a phone system ("Press 1 to hear your friends' updates, press 2 to post an update...")

I'm not sure there's such a strong distinction between a tech business and a business that uses tech nowadays.

Google's core beginning was PageRank (under license from Stanford), without which it would've been no better than similar offerings at the time. Additionally, their approach to setting up their equipment and making use of cheap gear and managing said cheap gear probably gave them a leg up...something they still do today at scale. So, no, you can't really make that analogy.

Facebook was a tech company specifically, and not a company using tech, because the entire product was devoted to rapidly filling social profiles and spinning up the microsites that were user accounts, mining those accounts for information, and then integrating as a platform for advertisers and game developers. None of that tech is really stuff they could've outsourced and still had a business--they couldn't have just white-labeled MySpace for example and gotten away with it.

It's the difference in preference between e.g. $500k nearly sure profit versus a tiny chance of $100M profit but a most likely result of losing it all. For a "normal" business, the first one is preferable; a startup is the condition where the first result is considered unacceptable and the investors are there for the second possibility only - go big or go home.

It means quite different cultures, quite different "correct answers" to similar situations, and has mostly opposite requirements for many business factors and people involved.

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