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Question is whether that corner cafe falls into the category of a startup or not.

starbucks started out this way, in downtown seattle. literally a corner cafe.

but of course this (i believe false) line of reasoning then raises the question of what tiny business couldn't be considered to be potentially an augmenter of the "human condition for a huge number of people", doesn't it?

I think you're still missing the definition of the startup in your reasoning. Starbucks wasn't a startup, and their intention probably wasn't to be the biggest coffee shop chain in the world when they first started. Startups by definition are looking for extreme growth and want to be the biggest "X" of their industry eventually from the getgo. An informed deduction is that you shouldn't make a product that doesn't solve a good large problem if you are a conventional startup.

you are making my point for me.

A mentor of mine drew the line like this (paraphrased) -- a "startup" is a new company with some innovation at its core. Without the focus on innovation, most discussions tend to drift off into categorical murk such as whether mom-n-pop shops are startups, whether the local hardware guy is "an entrepreneur", etc.

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