A traditional business generally has an established solution to a known problem and has not developed anything particularly new.
For example, a new sushi restaurant in your neighborhood may be a new business, but it is by no means a startup. However, if a new local company had developed a device that automated sushi-making and tried to get sushi restaurants to try it, that would be a startup. The restaurant is simply trying to satisfy the neighborhood’s needs for sushi, whereas the device company is trying to change all sushi restaurants with its new method.
A startup is centered on an innovation that has never been brought to market before. This could be a product or service, a technology, a process, a brand, or even a new business model. Generally, they have big industry-changing goals about disrupting the market leader or current customer behavior.
Think Uber, an inventive startup that originally operated in San Francisco. It built off the time-tested taxi model – a business – and created a unique ride-sharing app that had never existed previously.