Apple’s relatively new M1 Macs that rely on Apple silicon have a number of usability differences from previous Intel0based Macs. One difference that’s tripped some readers up is how to start up or boot the M1 Mac from an external drive. Intel Macs generally make this easy.
You might want to use a bootable external drive to have a higher-capacity SSD than is offered or affordable via Apple’s pricing. Or you want one for backup in case something goes very pear shaped with your M1 Mac.
Testing indicates that the following are required to start up from an external volume:
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A Thunderbolt 3 drive. That’s not just one that uses the USB-C connector, but is a native USB 3.1 or 3.2 drive. Nor can you use a Type A adapter for a USB 3.0 or later drive. Success appears to require a native Thunderbolt 3 drive.