Startup 101 - Back to the Basics: What differentiates a startup from a business?

Ines Fenner
December 16, 2021

If you’re new to the startup world, you probably have a lot of questions. You might be wondering what a startup is in the first place. What is an entrepreneur, exactly? And what is the difference between a startup and a small business?

While these questions may seem small, they’re still important to ask.

Let's go back to the basics with Startup 101.

What is an entrepreneur?

Some consider entrepreneurs to be ideators. Problem solvers. Creators.

To put it simply, an entrepreneur is someone who starts a business and is willing to risk losing money in order to make money. They organize, manage, and assume the risks of a business or enterprise. Entrepreneurs are those that are at the front line, solving the problems they come across and founding businesses to help manufacture a solution to the problem.

Just like anything, being an entrepreneur has its benefits and drawbacks.


     1. Full-control

Your business, your decisions. As an entrepreneur, you are your own boss. You are working for yourself and have full-control over your business. In some cases, there may be situations or external circumstances in which you are not in control of, but ultimately you still have full control of your response. All of the decisions fall back on you.

      2. Passion

As an entrepreneur, you get to do what you love. Rather than being a small cog in building someone else’s dream and future, you get to build something you love. If you decide to take the entrepreneurship route, it’s most likely because you are passionate about the business you are building. Passion is incredible motivating.

     3. Flexibility

A perk of entrepreneurship is flexibility. You are your own boss so you make the rules. You can work remotely from anywhere in the world, set your own hours, have a flexible schedule and you don’t have to request leave.


  1. High level of responsibility

You are in charge of the company’s future which can be a heavy weight to carry. You’re responsible for the overall running of the company and your employees. If you secure investments, you are also responsible for millions of euros of other people’s money.

  1. It won’t always be plain sailing

There will be good days and bad days. Unexpected problems will occur and it will be your responsibility to tackle these head on.

  1. Lack of a roadmap

You’re creating something that has never been done. If your product is unique, you’ll have to figure it out as you go along. You will have to tackle the work day-by-day.

Entrepreneurship is not for the faint-hearted.

Being an entrepreneur, as you may have guessed, comes with its risks. Entrepreneurs are typically intensely involved in whatever business or startup they create. This means that they usually financially support their business to begin with, and the line between work and personal life can become blurred.

To be a successful entrepreneur, you should have some, if not all, of the following characteristics:    






-Problem solver

-Clear vision




Being an entrepreneur is not just a life of stress. It can be incredibly rewarding, and that’s why hundreds of thousands of people start their own businesses each year. There’s the chance to become self-sufficient, flexible in when you work and where, and you have the chance of becoming wealthy. For many, the pay-off is absolutely worth it.

So, if becoming an entrepreneur is something you’re interested in doing, the rewards for your efforts could be well worth it.

What is a startup?

Startups are considered new businesses that have been founded with the intention of becoming very large, much larger than the scope the founder can individually handle. They want to solve a practical problem they’ve faced. Startups are ideally designed and thought to be scalable, meaning that it is planned and hoped that it becomes exponentially larger over time.

Startups typically have a small number of employees and the potential for rapid growth. They create and develop products with a broad appeal that with do not yet exist or solve a problem better than the alternatives currently available.

Usually, startups don’t succeed. In fact, 90% of all startups fail. It’s a tough world out there and sometimes, people and their ideas find themselves in the wrong place at the wrong time.

How is a startup different from a business or company?

You’d think that every company ever has started as a startup, because that’s what the name suggests, right? A company has indeed started up at some point. However, the name is a bit misleading, because while not all companies are startups, all startups are companies.

A startup is essentially a company with a business model that encourages innovation. Successful startup companies can be described as disruptive, innovative, scable, and fast growing.

Regular companies or businesses simply replicate what’s been done before. For example, opening a café would not be considered particularly innovative. Cafés have been around for over 500 years and are nothing new. The first record of a public place serving coffee dates back to 1475, and since then, hundreds of thousands of cafes have sprouted up all over the world. This is an example of a business. It’s not unique nor inherently innovative.

It is important to note that there is nothing wrong with replicating other businesses and following their roadmap. However, startups differ from this.

Startups are founded on innovation, addressing shortcomings in existing products or developing entirely new categories of goods and services. Many startups are dubbed as “disruptors” as they disrupt established ways of thinking.