The word startup is very common in the tech world. However, startups are not exclusively tech companies. They can be found in different sectors including healthcare, Business-to-Business (B2B) software and services, consumer goods and services, financial technology (fintech), and consumer media. Notable startups in each sector are Asana, Flo Health, Airbnb, Robinhood, and Reddit. Startups can also be classified based on the type of services they provide, their affiliation to a larger company, growth potential or scalability, and their objective. Based on this, there are 6 types of startups;

1. Buyable startups
2. Scalable startups
3. Small business startups
4. Big business startups
5. Lifestyle startups
6. Social startups 

Let’s take a look at each different type of startup. 

1. Buyable startup

These are startups that are founded with the sole objective of being sold to bigger companies for profit. Buyable startups are common in the technology and software sector. These startups are nurtured from the idea stage to the execution stage before being sold out to companies that are capable of providing the infrastructure for it to grow and become profitable. Examples are WhatsApp which was sold to Facebook, YouTube, Beats Music, and Beats Electronics which was acquired by Apple. 

2. Scalable startups 

Startups in this category have huge growth potential. Scalable startups receive much attention from investors because they have the ability to become very profitable in a short time. This type of startup is common in the tech sphere and some examples of scalable startups are Google, Facebook, and Uber. 

3. Small business startup 

Small business startups are quite literally small businesses run by individuals. partnerships or small teams. One advantage of small business startups is that due to their small size, they are mostly self-funded. So the founders are not often under intense pressure to scale up. The business grows at its own pace while being profitable and scalable if need be. Small business startups are often non-tech businesses such as grocery stores, travel agencies, bakeries, etc. 

4. Big business startups 

When large companies like Facebook, Google, or Apple find a niche they want to exploit, they can go ahead to start a new company. The new company is not a standalone business but is affiliated with the bigger and more established parent company. Startups that are found this way are referred to as big business startups. Big business startups help established companies adapt, innovate, and stay relevant in a market that’s constantly changing. 

5. Lifestyle startups 

Who said you can’t earn a living doing what you love to do? Well, nobody and that’s why lifestyle startups is springing up everywhere. These are businesses that are born out of passion. They start as a hobby and initially, the founders do not have any particular interest in making a living from it.  Lifestyle startups mostly have to do with sharing a particular knowledge or skill acquired. Examples are classes that teach specific skills like dancing, gardening, photography, and floriculture.

6. Social startups 

Not all startups are found with the intent of making profits. Social startups are charities and nonprofit companies that simply exist to do good. Like many other startups, social startups also have a specific goal or objective. Since they do not make any profits, these startups have to solicit grants and donations to remain sustainable. A common example of a social startup is code.org, an education nonprofit that wants to increase the knowledge of computer science in schools. They particularly focus on young women and students who are underrepresented in this field. 

Final note!!!

So far, our focus has been on the different types of startups. For entrepreneurs who have a business idea, this will help you know what category your business will fall under. If you found this helpful, then I’m sure you’ll be pleased to know we can do much more to make your entrepreneurial journey easier. Kindly reach out to us at Epirus Ventures and we will be happy to assist you.