You're correct. There's a sort of progression in the technical domain - Scientist/Mathematician (creates the knowledge) -> Engineer (applies it) -> End User.

In the computer field, there's an extra step: Computer Scientist -> Software/Hardware Engineer -> Application Developer -> End User. The boundary b/t Engineer and Developer is sometimes vague, though.

TLDR - calling someone building an entire startup from scratch and 'Engineer' is perfectly accurate, since the level of software and hardware customization required will ensure they're doing alot more than just developing apps.

PS - not to belittle anyone's career, I fit squarely in the Developer category myself. As mentioned above, all are necessary pieces of the puzzle.