The Silicon Valley small business, the SV-SB, is a hybrid of sorts — it intertwines small business values and discipline with big tech know-how and ambition.

Founding teams may look like that of a “traditional” Silicon Valley startup. They’re native to Silicon Valley ethos, skills, and playbooks. But , beneath the surface, they’re different. You might see more solopreneurs and studios (and LLCs instead of C-corps). They value autonomy and flexibility. They envision a range of potentially good outcomes — not binary, all-or-nothing scenarios.

Teams stay small and run fast for as long as they can. I define a Silicon Valley small business as having 20 or fewer employees (and often less than 10). In my experience, startup teams above this size are forced to operate very differently — much slower, with more bureaucracy, and less alignment. But below the threshold, a savvy team can create leverage and punch above its size.

They’re growth-oriented and going for efficient scale. Unlike small businesses (and contrary to the common characterization of teams that bootstrap), SV-SBs aren’t just trying to build “lifestyle” businesses or modest passive income streams. They want to scale, as quickly and efficiently as possible. The desire and often the know-how to scale separates them from traditional small businesses, and their focus on doing it leaner and profitably can separate them from the traditional SV startup.

They try to bootstrap to profitability instead of relying on venture capital. They’re VC-literate yet aren’t charmed by the potential status, signal, or stability. Perhaps they raise the equivalent of a friends & family or pre-seed round but not much more. They look for capital-efficient businesses and prioritize profit alongside growth early on. With less money going in, there’s a lower bar for financial return. Moreover, “success” doesn’t require a billion dollar exit. Making millions is a win (and thousands keeps the team afloat).

from Rise of the Silicon Valley Small Business by Anu