For many first-time entrepreneurs, ‘startup’ can be a confusing term because it is used in many contexts. The Startup India campaign by Indian government has inspired millions, but has also led many to believe that a ‘startup’ simply means starting one’s own venture.  Starting a business is not new – people have been starting out on their own for hundreds of years. In fact, before organized corporate structure (which came in vogue during industrial revolution driven by division of labor and management theories of the likes of Adam Smith), perhaps everyone used to be ‘self-employed’ or a mini-entrepreneur.

But, in today’s business ecosystem, ‘startup’ is not just starting a new venture, but refers to extremely innovative businesses which can grow rapidly driven by massive unmet demand to gain disproportionate market-share. This exponential growth needs massive ‘risk-capital’, which is usually funded by seasoned fund managers/investors who can take upfront risk in the hope of exponential returns in the future – if the venture succeeds.

Here’s one of my slides that I often use in startup workshops to explain the difference in the ethos of a new ‘small business’  and a “startup”.

I also like this video which captures the differences quite well…  and especially, the candid way this person explains how he discovered that he was a small business and not a fundable startup.. ! 🙂

Hope this is useful for folks.

-Abhishek Sanghvi
Founder, iLEAD Group