Difference between a "new business" and a "startup" market research


Appears the largest difference difference a "new business" and a "startup" is the entities relationship to markets, the research of them, and as a result, the engagement of a market via some service, product, etc.

What's not clear to me is how the market research of a startup differs from a new business.

What is the best way to understand what the differences are, and more importantly, suggestions on addressing the market research that's related to startups?

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asked Mar 28 '12 at 02:20
Blunders .
899 points
  • why are you trying to distinguish between new businesses and startups? What is the problem you are facing? If you can't find a difference, then perhaps there is none and you are wasting your time on things that do not matter. – Tim J 12 years ago

1 Answer


All startups are new businesses, but not all new businesses are startups.

In common parlance, startups are technology companies trying to develop and market a new product or service. Startups begin without knowing if there is product-market fit, since the product is new to the market. Early on, many startups are unable to define their target market and must iterate over time to find a market in which their product can gain traction.

In contrast, most new businesses are addressing a known market need using an established business model. In it's first year or so, a grocery store, medical practice, restaurant, or bank would each qualify as a new business, but they would not typically be referred to as startups. These businesses are taking known products or services to an well understood market using a familiar business model.

New businesses have lots of market research options, while startups have few.

Because new businesses use well known business models, they know what market they are targeting. They can segment the market by location, income, education, gender, etc., and there are many services that will help them learn more about their target market. Here's an advanced example: There are market research services that can take a list of your customers' credit card numbers and tell you what other neighborhoods contain households with similar spending habits to those of your customers. These are the neighborhoods you can target for your next location.

B2C Startups, on the other hand, have a difficult time segmenting the market in a way that provides enough specificity to make a market research service valuable. B2B Startups have it a bit easier, but most still struggle.

answered Apr 4 '12 at 06:51
Michael Trafton
3,141 points
  • I disagree with your definition of a startup: "_startups are technology companies trying to develop and market a **new** product or service._". I don't think developing a **new** product has anything to do with it. There are very few new products developed. I think everyone would agree that Facebook was a startup when it first started, yet they weren't introducing a new product. MySpace and several other companies already existed in that market. I take by new product, you mean a new idea. Something that didn't exist before. – Zuly Gonzalez 12 years ago
  • Maybe we are splitting semantic hairs here, but facebook was a new product/service in a different market. Facebook initially targeted college students at elite U.S. universities. If memory serves, MySpace was targeting teenagers and was heavily music/band focused. While they were both what we now call social networking, it was doing something different from MySpace. While it is certainly the case that some startups are copying others, my feeling is that *most* are attacking a new problem, in a new way, or for a new market. – Michael Trafton 12 years ago
  • @Michael Trafton: The reason Facebook was a new product was because they require users to be "real" and use their real name, Myspace does not. – Blunders . 12 years ago

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