A Startup is NOT a Small Business

I just came back from the StartupQ8 event and it was great as usual. One of our early readers and early supporters (MyGreenSofa) was asking me about the reason why we are focusing more on Tech startups and neglecting other type of businesses such as restaurants and retailers…etc. It’s a good question, and I tried to answer this issue in a previous post back on July 2012. So allow me to explain this again.

There is a big difference between a Startup (Amazon, Google, 6alabat.comAirbnbUber.com….etc) and a Small Business (marketing company, fashion shop, consulting company, Thai food restaurant….etc).

In a Startup you are:

  • Building a new product 
  • Solving a new problem or fulfilling a new need
  • Entering a new market with new customers (doesn’t really know if there is a need or not)
  • Founders have a vision to scale and become a world class company
  • Very risky, yet very rewarding
  • Want to change the world to a better place
  • Attract bright and smart talents (employ more than 1,000 people in the long-term)
  • Revenue more than US$50M

In a Small Business you have:

  • Known product/service
  • Known Customer with known market
  • Low risk
  • Want to keep the business small or within the family
  • Have low potential to grow
  • Founder vision is to  make enough money to feed the family
  •  Attract cheap labor (create 10-100 jobs)

Startup vs Small Business

So here in StartupQ8 we believe that in Kuwait we have enough of small businesses and a lack of startups. I’m not saying that small businesses are bad, but I think they are doing good without us. However, we don’t have many startups (companies that can grow globally, create value to customers around the world, create thousands of jobs  and create millions of dollars to their shareholders). We need to have more of these companies, and we believe that the kind of help they need is much different than small businesses, and we also believe that these startups will most probably be Tech related startups.

Thanks MyGreenSofa for your question today, and I hope this post made things more clearer on why StartupQ8 is more focused in scalable Tech startups.

 

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4 Comments

  1. Thank you, i used to have vague idea about it,, is a startup by its nature should be scalable in the long run? Does it really matter if its a startup or a small business, as long as it creates jobs for the others?

    Reply
    • Well I tried to make it less confusing, but there are people who came up with a name Scalable Startup to differentiate between Startups that can grow and become huge corporations and life style Startups.
      In a personal level you don’t really care how much jobs you are going to create, but the government need to understand the difference. Each one of them need a different kind of help and support. The government now avoids investing and support crazy ideas, and the reality is, all successful companies (google, amazon, airbnb, facebook, youtube…etc) all started as crazy ideas!!

      I can go on and on in explaining my point, easier to explain it next time I see you guys 🙂

      Reply
  2. Thanks Abdullah for the blog and MyGreenSofa for getting this topic up. As I agree with the concept Abdullah mentions, Small business, may that be a retail, restaurant or what ever, should not shy away from the technology advantage they can leverage and benefit from. The aim is to make the life easy for the entrepreneur, allowing him to target larger audience, track and manage without having to be at the work place, making it scalable for expansions. The beauty of small business is in its simplicity, which if backed by a solid system makes the life of the owner easy.

    Reply
  1. Startup = Small Business? « Monica Selby

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