Can side projects help build a startup someday? [I will not promote]

Hi, I see a lot of people promoting their own apps/website on reddit. I wonder what is the final destination. Let's assume that someone is able to find a product market fit, gets some customers and makes a few hundred to a few thousand dollars per month. What is next after that? Do they just keep replicating their playbook and make more websites? I know friends who went to Y-combinator and are running a startup where they employ 20-50 people. I may be wrong but it seems that such "startup" people are at a different financial level than what can be typically accomplished via a side project. Feel free to correct me. Is it fair to say that working on side projects help get the relevant experience during the phase where someone is not comfortable in quitting their job and just working on their side project full time. What is the distinction between having a side project vs running a startup? If someone has the goal of running a startup someday, is it better to just work for another startup rather than investing time on side projects? Would love to know your thoughts