Are We Truly in a 'Golden Age' of Entrepreneurship?
There’s no question that entrepreneurs (and employees) these days have it pretty good. A good chunk of the startup process for almost any business can be accomplished by almost anyone with a basic Internet connection and a little bit of time.
Then, once you've started the process, the world is yours to message and engage with. Indeed, the market is flooded with new apps, sites and ideas that combine old ideas in innovative ways (“old,” in this context, being just a few months after launch).
With today's tech and trends seeming to favor entrepreneurship, is it fair to say we’re currently in a “golden age” of entrepreneurship? Let’s explore.
The informality of semantics
The first task is to address the semantics of the phrase “golden age.” It’s a vague term, with no inherent quantitative bounds. You could interpret the age we're in, for example, as a better-than-average time for entrepreneurs, or a once-only opportunity entrepreneurs will never enjoy again.
Equally perplexing is the fact that "golden" might designate only an age where entrepreneurs can make the most profit, or an age when the most entrepreneurs are competing in the same market.
While the merits of any application could be argued, let’s stick with a general, middle-of-the-road definition. Here, a “golden age” of entrepreneurship refers to an era that makes it easy for entrepreneurs to start businesses and more likely that those businesses succeed -- and does all this to a degree far higher than what we’ve experienced in previous decades.
First, consider some of the arguments confirming today as a true “golden age”:
- Global connectivity. The Internet has made it possible for people anywhere in the world to connect instantly. Suddenly, the world has become a treasure trove of possible investors, partners, employees and customers ripe to plunder.
- Unlimited resources. Think about the free resources available: general information on Wikipedia, tutorials on YouTube, advanced website performance metrics with Google Analytics. The world’s information is at your fingertips, so there's no excuse for making decisions without data to back them up.
- Crowd approval. Social media and crowdfunding are just two new platforms that have dramatically improved entrepreneurial conditions. They serve as potential options for funding, potential customer bases, sources for market research and even a testing ground for new ideas -- and they function in real time.
- Funding availability. It’s certainly a golden age of startup funding from angel investors and venture capitalists. The amount of funding available to startups has grown considerably, year after year, for the past decade. According to CB Insights, 2014, the last full year on record, recorded $47.3 billion available.
- Popular fixation. Don’t rule out the influence of today's zeitgeist. Startup moguls are practically celebrities, with names like Mark Zuckerberg, Jeff Bezos and Elon Musk making headlines daily. People love entrepreneurs, and strive to follow their lead.
- Digital goods. Much of what we consume in the modern era is digital -- especially information and entertainment. Digital goods aren’t bogged down by the slow processes, permanence or high startup costs physical goods entail, making it easier to become an entrepreneur.
- Blue ocean. "Blue Ocean" is a term that argues for replacing competition with the creation of new market space. The Internet and our relationship with it are ever-evolving, providing a vast new frontier of ideas to create. Entrepreneurs can create demand in ways they never could before.
Next, consider some rebuttals:
- Selective funding. As mentioned, there’s a metric ton of funding out there for the taking, but where is that funding going? I recently reported on a phenomenon in the startup funding community that tends to channel this capital into startups that have the absolute best business plans. You may think of this as survival of the fittest at its most basic, but startups with promising ideas (but less buzz) have considerably lower chances of getting the capital. That inequality promises enhanced startup success only to a select few.
- Failure rates. There’s a flip side to the fast rise of tech startup superstars: Most of them end up fizzling out. Most entrepreneurs fail many times before ever succeeding, and thanks to accelerated tech growth and fickle consumer trends, it’s hard to stay relevant for longer than a few years.
- Limited paths. The vast availability and demand for digital goods creates a subtle restriction for potential new businesses. It’s actually harder to break into a traditional industry or one centered on physical goods than it used to be.
- Higher competition. I mentioned the “blue ocean” state of the digital frontier, but the tight interconnectedness and instant speed of the Internet opens the door to competition immediately. Come up with a unique idea, and a dozen hungry entrepreneurs will try to improve your model.
Is this really a “golden age” for entrepreneurship? I wish I could say for sure, though making a final decision would require even further fine-tuning of the term’s subjective definition. Entrepreneurs today have more opportunities, more resources and more potential to succeed than they ever have before, but those new doors also allow new challenges, new restrictions and new demands to enter in.
If the term referred only to entrepreneurial activity, I’d say that hands down, yes, we’re in a relative golden age. But that doesn’t mean that everything is golden for modern entrepreneurs.
What about you? Do you think we’re in a “golden age” of entrepreneurship?