Small satellites are wonderful opportunities and a potential serious space safety dilemma. Their size and mass could reduce launch costs greatly. Their limited kinematic capabilities and small cross sections could also complicate orbital safety. Several missions require many small satellites, increasing the overall risk to themselves and others. As efficient, miniaturized components and propulsion techniques develop, small satellites can operate on orbit longer and in higher orbits, posing enduring risks in higher orbits. This paper considers small satellite operational concepts and capabilities that should minimize risk without compromising technical or economic potential. We propose satellite classifications on orbit based on functionality rather than size or mass. Some large satellites with limited capability can present even worse risks than small satellites.