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Why, as a startup, you’ve never had it so good.
Now is an amazing time to be an entrepreneur. Startup communities are being built all over the world. You don’t need significant capital to start a new business. Knowledge about how to start and scale companies is more prevalent than ever.
Twenty years ago, the Internet was starting to be used in a commercial way. Today, an entire generation has grown up net native, and people are living their lives online and unaware of a time when the world wasn’t interconnected by technology.
The rapid change and increased availability of technology has radically impacted how companies are started and built. The dynamics around barriers to entry, especially in businesses that have constraints around communication and distribution, have shifted in favor of startups.
This applies no matter where you are located—from Silicon Valley to Berlin, from New York City to Iowa City. The emergence of concepts like the sharing economy, the growth of smartphone use and the accompanying app explosion, and the interconnectedness of many business functions are democratizing the ability to start a new company.
The Cost to Launch Is Approaching Zero
In the dot-com boom (1996–2001) software companies needed several million dollars of funding to buy equipment just to get started. There was no Google to help attract users, there was no PayPal to make payments frictionless, there was no AWS (Amazon Web Services) to remotely host your application, and there was no Shopify to build your e-commerce store.
Just as it was with the early settlers in Alaska, there was no infrastructure to support nascent entrepreneurs.
If you wanted to launch a jewelry business online in 1996, you not only had to have kickass jewelry, you had to build your own storefront and your own payment transaction engine, and you had to attract customers one at a time. Basically, you had to put all the pieces together yourself.
By the Web 2.0 era (2007), the cost to start an online business had dropped to less than $500,000. Much of the infrastructure that you needed existed in some form. By 2012, cloud computing had emerged along with software that integrated most of the supply and demand chains.
Now you could get going with under $50,000. Today, that number is even lower, with the requirement often being a laptop, access to free Wi-Fi at a Starbucks, and a few online services. This radical drop in cost is a result of the rise of Internet infrastructure connecting all aspects of business along with the immigration of billions of people onto the Internet.
The World Is Flat
In 2005, when Thomas Friedman wrote The World Is Flat, the metaphor of viewing the world as a level playing field set a great backdrop to what happened around entrepreneurship over the next decade.
Suddenly, due to technology and the broad spread of information, entrepreneurs became geo-agnostic (i.e., they no longer must live in a certain place to do business). As broadband and mobile Internet expanded around the world, physical location mattered much less.
Today, you can…