Difference between Startup and Scale-Up
Updated: Nov 28, 2022
You have most likely heard the terms Startup and Scale-Up in very similar contexts, which consequently made it difficult to understand their differences.
These two terms refer to different stages of companies, Startup refers to the initial stage and Scale-Up as the later one. Basically the definitions for each of the terms are:
What is Startup
A startup is an early stage company whose main objective is to find the product-market fit, which means the search for a product or service that really solves the problem of a market segment in a sustainable way. It is the moment when the value of the product or service is perceived by a significant portion of the market.
In this way, a startup seeks to find a business model that allows for accelerated growth. This differentiates it from a traditional small or medium-sized company, which does not necessarily aim for growth, but rather profit in the short term, while many startups take years to make their first profit.
What is Scale-Up
Scale-Up is a company that has already validated its product with some customer segment and has already proven that it is a sustainable business (it has reached the product-market fit), so, as the name says, its goal is to scale, in other words , grow up.
With this definition, it would be quite difficult to identify whether a company is still a Startup or can already be considered a Scale-Up, to help with this, there are criteria that facilitate this classification. According to the Organization for Economic Co-operation and Development (OECD), a Scale-Up is a company that has an average annual growth of 20% in the last 3 years with at least 10 employees at the beginning of the period.