Starting company is a daunting and highly demanding venture to undertake, no matter the size of your company. But a lot has changed in the business and start-up world in the last 20 years. In his blog post I would like to share my observations on why it has never been a better time to start a company than now....
1. You can do a "Dry Run"
Before you start a business to day, there are plenty of possibilities to practice before you jump in. Depending on what you plan to do, setting up a new business activity will require just a fraction of the start-up capital compared to what it used to. Particularly if your business if based online, there is often no need to hire staff and you can scale your business gradually as it grows.
Trial and error is the best way to learn from our mistakes, and doing it at a low cost in today’s startup world is even better. This is the age is marked by kids starting their first businesses at a very young age: after their lemonade stands, they now sell their Minecraft entitlements to friends, create and publish new games using online game-making apps, get Google Ad income from their YouTube channels and make an income writing apps. My 10-year-old son got his first entrepreneurial lesson the hard way: he decided to sell his drawings to his relatives. After publishing a basic website, he posted his drawings on there, emailed his relatives and asked for their business. He thought he would sell more by offering free shipping. Here came his first lesson - if you’re going to include free shipping, you should at least be selling your product at a higher price than the shipping costs.
So, already at an early age, you can learn what it means to be an entrepreneur. Learn from mistakes and get over the normal setbacks that come with setting up a business.
2. Start-up Culture is Cooler
The second thing that has changed a lot, is that the millennials are much more open and willing to join a start-up than ever before. Many graduates still like to work for big companies to boost their resumes. But many also realize that working for a small company means being thrown into the deep end, which gives them learning experiences which would take years to gain in the corporate world. It is cool to tell your friends that your work for a start-up than being accepted at a graduate trainee program for a big company. It is considered even cooler to start a company yourself and have a little of that Mark Zuckerberg aura rub off on you.
3. The World is your Talent Pool
The world is a much more global place than it was 20 years ago. More people speak a second language, it is easier to fly to far away places and calling Australia from the US no longer costs $1 per minute. This globalization has the effect that there is an increased mobility of the work force: people are not afraid to move for a good job. So if you start your business in a place where people want to live, you can actually draw from a talent pool much bigger than the one in your city’s borders.
It is also much easier to find qualified people to work for you as contractors on a project basis. There are quite a few online marketplaces like Upwork or Fiverr that will connect independent professionals with your business. This is a great way to find copywriters, software engineers and SOA specialists on a very flexible basis, which is exactly what you need when you start a business. And do you want to do something yourself, but don't know how? Access to know-how has never been easier, it is now just a few clicks away.
4. Easier Access to Capital
The third thing that has changed dramatically, is access to capital. In the past, you had to go down a long and arduous path of attracting venture capital. But venture capital mainly targets companies that are more established. Today, there is a great ecosystem of individuals and organizations that are interested in investing in early stage companies. Business angels or crowdfunding platforms are examples of financing sources that require relatively less effort than taking the venture capital route.
Additionally, many governments are realizing that the start-up ecosystem is really good for their economy as an important source for new jobs and employment. Therefore, there are now a lot of subsidies available from governments in the form of research grants and low cost loans.
5. Starting a Business...Simplified
But the seismic shift is that you can start your company with a lot less capital than before, purely because you can be a lot more efficient. If you started your company 50 years ago with a typewriter and postal mail system, you would need to hire a lot more staff for basic business processes. Email was introduced to business just 20 years ago at the time when cell phones were still bricks and only to be used in emergency situations. I’d like to point out a few tools that make the life of a startup a lot easier.
Hardware based office phone systems are not very flexible and expensive. Cloud based phone systems allow you to start up your office phone system the same day and add users and functionality on the fly. Where before you had to pay your service provider to program your hunt group, you can now do this yourself. Instead of hiring an internal IT staff member to manage your in-house email server, you can quickly get your company up and running with services like Google Apps. Online team communication software like Slack is making team collaboration much easier and more fun.
But it is not just communication that has become easier and more efficient. Long gone are the days where Salesforce or SAP were the only choices. These days there is a lot of competition in horizontal software applications, such as accounting, CRM or support ticket management, which is great news for start-ups. Pricing often starts with a free plan or perhaps $20 or $30 a user a month, which allows you to grow costs as your business grows. But best of all - the headaches of integrating different enterprise software solutions is slowly going away. The new breed of cloud based software solutions are all about integrating with each other through API connections. With this integration you can automate many common business processes. These incredible efficiency gains makes starting a business today so much....simpler.
So, there you have it. The time has never been better to start a business. The social economic changes and internet access have made our levels of efficiency, opportunities to learn, experiment and innovate so much more exciting. Access to capital is no longer the deciding factor if a business is going to be successful. So what are you waiting for?