Startup Types & Business Models
Understand Your Startup DNA Before You Build
- 10-15h/week recommended
- 3-4 months to graduate
- 1:1 mentoring and community access
- Personalized
- business plan & Product Pitch
- Online
- Practice-focused
Why it matters?
Why You Need to Know Types and Models of Startups
Before you build your startup, you must know what kind of business you’re creating and how it will make money. These two choices shape your product, your team, and your strategy. Without this clarity, you will waste time, miss your market opportunity, or burn out chasing the wrong model.
At aboveA Academy, we help founders align their ideas with the right strategy. So, we are always here to help you understand the various types of startups and business models. By doing this, we give you a huge advantage. Helping you plan smarter, test faster, and build with confidence – instead of guessing. Follow this guide to explore the boundless options you have with your potential business project in mind.
Choosing your right path will help you to
- Avoid launching a product that no one needs
- Find the Quickest and Best Way to Make Money
- Pick a Business model tailored to your ideal customer base
- Make your business model work for your goals
- Build something that grows without wasting time or cash
Play the Right Game!
“Pick the right game and play it with the right rules: that’s how founders go from noise to legacy. It’s not luck, it’s alignment. The model and the market decide how far your fire goes.”
Vita Klimaite, Head of Growth & Senior Instructor
Not all startups are built the same
What Are the Main Types of Startups?
Before you launch, it’s important to know what kind of startup you’re building. Your type shapes your strategy, funding, team, and future. Explore the most common startup types below, from solo brands to billion-dollar ventures, and discover where your idea fits in the big picture.
| Startup Type | Description | Example |
|---|---|---|
| Lifestyle Startup | Built for freedom, flexibility, and personal income. Prioritizes work-life balance. | Solo creator, fitness coach, agency |
| Scalable Startup | Designed to grow fast, usually tech-first, and VC-backed. Targets global markets. | SaaS platforms, marketplaces, AI apps |
| Social Startup | Focuses on solving social or environmental problems while generating revenue. | Impact-focused edtech, green startups |
| Buyable Startup | Lean, fast to build, and attractive for acquisition by larger companies. | Chrome extensions, niche B2B tools |
| Corporate Spin-Off | Launched within a large company but operates independently with startup agility. | Innovation lab ventures, internal tools |
| Small Business Startup | Traditional businesses with local focus and steady growth. | Cafes, service providers, retail shops |
| Platform Startup | Builds a system that connects two or more user groups. | Uber, Airbnb, freelance marketplaces |
| Tech-Enabled Startup | Not a tech company itself, but uses tech to improve a traditional business model. | Smart logistics, proptech, foodtech |
| Creator/Influencer Startup | Driven by personal brand, community, or niche expertise. Monetizes audience directly. | Substack newsletters, Patreon creators |
Choose Your focus
Startup Sectors & Innovation Fields
Picking your startup’s sector is a big deal. It doesn’t just shape what you build. It shapes who you’re building it for, how you’ll grow, and even who will back you. Some spaces move faster than others. Some offer more support, more funding, or more need. The right one can give your idea a serious head start.
Here’s why your choice matters now more than ever:
AI startups raised $19B in Q3 2024, making up 28% of all venture funding. That shows where investor confidence is growing.
The EU announced a €10B tech fund in 2025 to help scale startups. That means more support if you’re in the right place.
Healthcare startups now have a 15% higher survival rate than average. Some sectors just give you a better shot.
The sector you choose also affects the community around you; your mentors, your partnerships, and even your first hires. A strong ecosystem can lift your startup faster. That’s why we don’t just teach ideas – we help place them where they can grow best, with timing, support, and relevance on your side.
Now, here are some startup sectors and innovation fields you might want try tapping into:
🤖 AI and Machine Learning
AI startups build smart tools that learn and help with writing, chatting, or sorting data. They save time and make hard tasks easy. But they need lots of data and trust. If you focus on small, real-life problems, you can scale fast with simple, useful AI solutions that people actually want.
💸 FinTech (Financial Technology)
FinTech makes money easier. These startups help people pay, save, and invest using just a phone. It’s faster than old banks. Yet, there are many rules, and strong security is a must. If you can solve money problems for everyday users, the chance to build something people trust and use often is huge.
❤️ HealthTech
HealthTech startups build apps that help people feel better, stay active, or talk to doctors. Offer quick help without needing to visit clinics. It’s popular, but privacy laws are strict! If you focus on clear, helpful health tools that are easy to use, you can have a space to grow and support millions.
🛍️ E-commerce and DTC
This startup model is about selling products straight to customers online. No stores, no middle steps. Fast and gives full control. Although it can face competition and shipping can be tricky. If you can build a fun, easy shopping brand with enough room to introduce more variants later – then do it!
🌱 ClimateTech
ClimateTech startups fix big problems like air pollution, waste, and energy use. They help people and the planet. Everyone wants cleaner options, but they must really work. If you can make it eco-friendly, scalable, and affordable, the market will be wide open for you!
🔐 Cybersecurity
Cybersecurity focuses on protecting users’ data and making them feel safe when working, shopping, or chatting. But the challenge is that these threats shift quickly, and trust makes or breaks you. Yet, there’s a huge demand for easy-to-use security solutions, especially in 2025.
🎮 Gaming & GameTech
Gaming startups build fun, interactive worlds or tools for game makers. Players want new ways to explore, play, and compete. It’s a huge, growing space with global fans. But making games takes time and skill. If you create tools that help others build or play better, there’s a big space to grow with creativity!
📈 MarTech (Marketing Technology)
MarTech startups build tools that help businesses promote themselves. They track ads, schedule posts, and measure results. Every brand wants to grow online. But many tools feel confusing or too complex. If you build something simple that shows clear results fast, there’s big demand from small businesses trying to stand out.
🚚 Logistics and Supply Chain
They help move stuff faster from factories to homes. They track items, plan routes, and avoid delays, saving time and money. But real-world issues like weather can still cause problems. If you can make shipping smarter for small sellers, there’s a real need, and not many easy tools out there yet.
🎓 EdTech (Education Technology)
EdTech startups create fun ways to learn from phones or laptops. They help kids, teachers, and adults learn anything, anytime. But many tools are boring or hard to grow. If you build playful, smart products that make learning fun, avoid market saturation by offering identical solutions, then go for it!
🏢 Enterprise SaaS
Enterprise SaaS builds tools for teams, like apps to chat, plan, or track tasks. It’s used daily and earns steady money. But many tools feel the same. If you create simple software that really solves daily problems at work, your startup can stand out in a busy but valuable market.
🏘️ PropTech
PropTech makes it easier to buy, rent, or manage property. You can do things online that once took weeks. It’s faster and less stressful. But trust matters a lot in real estate and the market. If you can help people make smart home decisions with clear info, there’s space to build something people truly rely on.
🌾 AgriTech and FoodTech
AgriTech and FoodTech startups change how food is grown, shared, or eaten. They help farms work smarter or create new plant-based meals. People want healthier and greener choices. But supply chains are tricky. If you focus on easy or low-waste solutions, there’s growing space to feed the world in better ways.
👩🎤 Creator Economy
Creator Economy startups help artists, streamers, and writers earn from their fans. They sell content, get tips, or run memberships. It’s fun, flexible, and personal. But creators need simple tools that save time. If you build something that helps them grow and earn faster, there’s a huge space with millions still figuring it out.
👥 HRTech (People & Work Tools)
HRTech startups help companies hire, pay, and support their teams. They make it easier to track time, manage benefits, or check performance. Remote work made these tools super important. But many feel clunky or cold. If you build something that feels human and easy to use, there’s real demand in small and growing teams.
⚖️ LegalTech
LegalTech startups make legal help simple and fast. They help people write contracts, get advice, or stay safe with rules. Lawyers are costly and slow, so people want better options. But legal stuff must be very accurate. If you create easy, trusted tools for legal tasks, there’s big space for everyday users and small teams.
🧬 BioTech
BioTech startups use science to help people and nature. They build new medicines, study genes, or improve crops. This field can change lives. But it needs deep knowledge, testing, and patience. If you mix strong research with real-world use, there’s a chance to shape health, farming, or the future of how we live.
✈️ TravelTech
TravelTech startups make planning trips easy. People can book flights, hotels, and tours with just a few taps. They want quick, fun, and stress-free travel. But things change fast: weather, prices, delays. If you help people travel smarter or save money, there’s still space to build something travelers will trust and love.
🏦 InsurTech
InsurTech startups improve how people buy and manage insurance. They make sign-up fast, explain things better, and help with claims. Most folks find insurance confusing and slow. But trust is everything here. If you make clear, friendly tools that help people feel safe, there’s a big chance to grow in this old, hard-to-love industry.
🏛️ GovTech (Civic Technology)
BioTech startups use science to help people and nature. They build new medicines, study genes, or improve crops. This field can change lives. But it needs deep knowledge, testing, and patience. If you mix strong research with real-world use, there’s a chance to shape health, farming, or the future of how we live.
🏢 Remote Work (WorkTech)
These startups help remote teams stay connected. From video calls to task boards, they make working from anywhere feel easy. Since 2020, remote work has kept growing. But teams still struggle to feel close. If you create tools that mix fun and focus, there’s room to lead the future of how teams work together.
These are just some of the most popular startup sectors today, but there are many more. Think of SpaceTech, SportsTech, OceanTech, even PetTech! Fresh new fields are born all the time. Startups follow problems, passion, and possibilities. With enough creativity, the list doesn’t end because the future is built by people who imagine what’s missing.
How should my startup make money?
What Is a Startup Business Model?
Secondly, you need to decide what business model you want to apply to your startup. Basically, a business model is the system behind how your startup earns revenue. It defines how you create value and how you get paid for it.
Choosing the right model helps you:
Align with how your users behave
Forecast cash flow early
Identify scalable paths to growth
Know what metrics matter most for your success
Below are the most widely used models in today’s startup ecosystem. You don’t need to pick just one: some of the most successful startups combine them.
Subscription Model
Users pay a recurring fee (monthly or annually) for ongoing access to your product or service. This model creates predictable revenue and works well for content, tools, and memberships.
Used by: Netflix, Notion, Figma, Spotify, Adobe
Freemium Model
Offer a free basic version to attract users, then charge for advanced features or access. Great for user acquisition and long-term upsells.
Used by: Canva, Grammarly, Zoom, Dropbox, Mailchimp
Marketplace Model
You connect buyers and sellers, providing the platform where transactions happen. Revenue comes from commissions, fees, or listing charges.
Used by: Airbnb, Etsy, Fiverr, Upwork, eBay
Direct-to-Consumer (DTC) Model
Sell directly to customers online without relying on retail middlemen. DTC startups manage their own brand, user experience, and margins.
Used by: Warby Parker, Glossier, Allbirds, Casper, Gymshark
Ad-Based Model
Provide your service or content for free, and earn money by displaying ads to your audience. The larger your user base, the more ad revenue.
Used by: YouTube, Meta (Facebook), BuzzFeed, Reddit, TikTok
Licensing Model
Other businesses pay to use your technology, intellectual property, or product under a license agreement. Works well for software, IP, and media.
Used by: Oracle, Microsoft (Windows licensing), Shutterstock, SAP
Commission-Based Model
Earn a percentage of each transaction, sale, or referral completed on your platform. A lean and scalable model is often paired with affiliate marketing.
Used by: Booking.com, Skyscanner, Amazon Associates, affiliate blogs, content creators
Productized Service Model
Turn a traditional service into a repeatable, packaged product. Customers pay for fixed outcomes or bundles instead of custom quotes.
Used by: Design Pickle, The Futur Pro Group, online coaching programs
Pay-Per-Use (Usage-Based) Model
Customers only pay for what they actually use; no flat fees. Ideal for infrastructure or API-driven products
Used by: AWS (Amazon Web Services), Twilio, Algolia, Zapier
Franchise Model
You license your brand and operating model to others who run it in their own location. Revenue comes from fees and royalties.
Used by: McDonald’s, Anytime Fitness, Subway, Domino’s
Choosing your right path will help you to
While picking the right direction for your startup, you might also want to consider the following matters of concern, such as:
- How do my users prefer to pay – one-time, ongoing, or by usage?
Can I afford to offer something free to start with?
What will scale as my customer base grows?
Is my product better sold to individuals, businesses, or both?
But if you are yet not sure – don’t worry because at aboveA Academy, we help founders test their model fast, so you don’t have to guess what works. With our mentors, you will get real feedback, access to our business model templates, and the means to test-before-you-scale.
How to Choose Your Startup Type and Model
Choosing the right type of startup and business model is one of the most important early steps you’ll take. It shapes how you build, grow, and make money. But let’s be honest – it’s confusing when you’re just getting started. Most founders skip this and end up stuck later. So where do you begin?
Start by asking yourself:
- Do I want to grow fast or build slow and steady?
- Am I solving a personal problem or chasing a big market?
- Do I want to run this alone, or build a big team?
- How will people pay me ?
- Do I care more about freedom, impact, or a future exit?
If your goal is to reach millions fast, a Scalable Startup with a subscription or marketplace model might fit. If you want control and freedom, a Lifestyle Startup or Productized Service model could be better. There’s no perfect answer: only what works best for your idea, values, and resources. What matters is choosing intentionally.
Inside our Business Starter and Business Accelerator programs, we help test and refine your direction. You don’t just learn – you apply practically. After you’re done with your course, you will leave with a clear startup type, model, and early roadmap you can grow from.
Know exactly where you’re headed
Limited Enrollment for the Next Cohort – Apply Now!
Starting dates:
July 7th
Application deadline: 30th of June, 2025
August 4th
Application deadline: 28th of July, 2025
Commitment to Your Success
Personalized Guidance from Industry Experts
Support Beyond Graduation – Stay Connected
Learn how to build your MVP
How to Build the Right MVP for Your Startup Type
Not every startup needs to launch with a polished product. In fact, most shouldn’t. What you need instead is an MVP (a Minimum Viable Product), something small, simple, and focused that proves people actually want what you’re building.
However, a lot of new founders think “MVP” means building a full version with fewer features. But that’s not quite right. A good MVP is designed to test one key thing: demand.
Your MVP should match the type of startup you’re building. You don’t need to copy what other founders did, but you just need to build the minimum version that fits your model.
Let’s say you’re creating a marketplace. You don’t need thousands of listings or complex filters. You might start with just two or three listings on a simple landing page, plus a form that lets people show interest or sign up.
Running a DTC brand? Your MVP might be one product page, one strong offer, and a “coming soon” button that captures emails or pre-orders. What about a SaaS product? Your MVP might not even be software – just a prototype or manual version of one key task you plan to automate later. Get someone to try it. Watch what they do. Learn.
Each type has its own path, and inside our Business Starter and Business Acceleration programs, we help you design the right MVP for yours. You’ll get access to real examples, user testing templates, and worksheets that walk you through the process step-by-step.
Because launching isn’t about building more. It’s about proving what matters first.
Common Startup Mistakes (and What Investors Actually Want)
Let’s get real for a moment. Every founder makes mistakes. But some of them cost time, money, or worse, the chance to grow. However, most of these slip-ups are avoidable when you know what to look for.
One of the biggest mistakes we see is building too much before talking to real users. You spend months perfecting a product… only to realize no one needed it. Another? Choosing the wrong business model for your idea, which lead to pricing problems and poor growth later.
Many founders also often try to pitch to investors too early, before they’ve validated anything. A pretty pitch deck isn’t what gets funding – traction, valid proof, and clarity are. And here’s one more: chasing trends instead of solving real problems. It’s tempting to copy what’s hot, but true opportunity lies in underserved pain points.
So what do investors actually want to see?
A clear, real-world problem with early proof people care
A focused MVP (not a bloated product)
A business model that can scale with healthy margins
A founder who understands their market and their numbers
A smart go-to-market plan that shows how you’ll find your first customers
Early signals of traction – even small wins like waitlists, signups, or feedback count
So you have an idea — now what?
Where to Start If You Have an Idea
This is where most people get stuck. You’ve got a business idea, maybe even a rough name or product in mind, but you’re not sure what to do next. Do you build it? Design a logo? Find a co-founder? It’s easy to feel overwhelmed.
Truth is, you don’t need to do everything at once. You just need to start small, smart, and focused. Here’s a simple 3-step path we use inside aboveA Academy to help first-time founders move forward:
Step 1: Validate 🧠
Before you build anything, find out if people even care. Talk to potential users. Ask questions. Look for real pain points. Validation is about listening, not pitching.
Step 2: Sketch ✏️
Put your idea on paper or slides. Sketch out the user journey, the core offer, and how people will find you. Don’t worry about perfection this is just thinking in motion.
Step 3: Test 🧪
Build the tiniest version possible. That might be a landing page, form, or a clickable prototype. Show it to real people and learn from their reactions.
Even if you’re not technical, you can start here. You don’t need code – you need clarity. Inside our programs, we walk you through these steps with templates, examples, and personal guidance.
You’ve got an idea. Let’s turn it into something real – the right way!
Build and Grow with Confidence
Apply Now – Limited Spots, Big Opportunities!
Starting dates:
July 7th
Application deadline: 30th of June, 2025
August 4th
Application deadline: 28th of July, 2025
Frequently Asked Questions
What’s the difference between a startup type and a business model?
Your startup type is about what kind of company you’re building (like lifestyle, scalable, social). Your business model is how that company makes money, such as subscription, freemium, or direct sales. You need both to stay focused and build smart.
How do I know what kind of startup I’m building?
Start with your goals. Do you want freedom, fast growth, or impact? Then look at your product and users. We guide you through this inside the Business Starter Program with decision tools and real-world examples.
Can I change my business model later?
Yes, many great startups pivot. But it’s better to choose one that fits your audience and product early on. A clear model helps you test faster and build more confidently from the start.
What does an MVP actually include?
An MVP is the smallest version of your idea that proves people care. It could be a landing page, a prototype, or even a Google Form. It’s not about coding – it’s about learning fast.
I’m not technical. Can I still build a startup?
Absolutely. Many successful founders don’t code. With the right guidance, you can sketch, test, and validate ideas using no-code tools or basic prototypes. We show you exactly how inside our program.
What do investors look for in early-stage startups?
Investors want proof: that there’s a real problem, people want your solution, and your model can grow. You don’t need to be perfect: just clear, focused, and prepared.
What are the most common mistakes early founders make?
Building too much before testing, choosing the wrong model, skipping validation, or ignoring user feedback. These slow down growth or lead to wasted effort. We teach how to avoid them with simple systems.
Can I follow more than one business model at the start?
You can test ideas, but it’s better to focus on one model early. Split focus means unclear messaging and harder decisions. Pick one, prove it, then explore new models once you’re stable.
I have an idea. What’s my first step?
Validate it. Talk to users. Sketch the journey. Build a small test. Inside the aboveA Academy, we guide you through all of this – even if you’re just getting started today.