What is a Start-Up?
A start-up has some special factor that will allow it to grow/scale really fast.
Basically, if you are in the corn business, you have to grow the corn, care for the corn, harvest the corn, transport the corn, and sell the corn, but only as much as you have because you can’t produce more right away if demand goes up.
If, however, you are in the poker game app business, you spend some time building the software to run the poker game app, turn on your payment window where people can pay for the poker game app, and then just put most of that money directly into web storage and marketing to grow. If you get investment at that point so you aren’t waiting for each individual $0.99 payment to buy just a little more storage or marketing or development, and can instead buy a ton more storage and marketing and development, you can grow REALLY fast. That’s a start-up.
Where you don’t need to grow and harvest and re-invest revenue slowly into building your business larger, you can build your company to be as big as it needs very quickly. Software companies lend themselves well to this. Certain physical products now do, as well, with 3D printing for prototypes, rapid manufacturing, etc. Industries that require a lot of human labor (very high cost) for each good sold don’t lend themselves well to this model, and are likely to follow a traditional business growth model or remain a small business- both of which certainly have value and their places in our society.
It’s not a perfect explanation, but hopefully some foundation to work from when thinking and talking about start-ups.
