Should your next startup be a firm? In conversational usage, the terms are synonyms, so the question might seem odd.
Economically speaking, a firm is a for-profit entity detached from market solutions of the day. The label implies some sort of innovation is happening behind the business’s doors, whether through novel production techniques, new organizational patterns or previously unseen products.
To be clear, the terms aren’t mutually exclusive. Some startups are firms, but certainly not every startup qualifies. Only startups that do innovative things that cannot fully be done through simple buying and selling are firms.