It's a funny time for fans of entrepreneurship. Statistics show that business formation is actually down in the U.S., but hype around startups and entrepreneurs is clearly way, way up. So which is it--a golden age or a deep lull when it comes to founding companies?
That's the fascinating question pondered recently by British entrepreneur Luke Johnson in one of his Financial Times columns. Quoting Dickens's famous opener, Johnson goes on to lay out the evidence for both the defense and the prosecution, explaining why now could be seen as both a great time for entrepreneurs and a truly tough time to start up.
The Good News …
In favor of the entrepreneurship optimists, he cites:
- The abundance of advice and mentors for would-be entrepreneurs, both online and off
- Crowdfunding, peer-to-peer lending, and other innovative forms of finance (plus, in the UK, government initiatives to get banks lending more to businesses) as well as historically low interest rates
- More angel investors than ever before
- Tech tools that make it easier and faster to test and improve a business idea.
- Increased acceptance and understanding of entrepreneurship in the culture (i.e., your parents are now less likely to freak out if you want to start a business)
- Co-working spaces and other communities to support freelancers
… and the Bad
That's an encouragingly long list of positive factors for aspiring entrepreneurs, but Johnson warns that all is not flowers and sunshine for would-be founders. Other less-positive influences on the startup scene include:
- The visibility of high-profile windfalls and acquisitions warping expectations of entrepreneurship
- Increased competition in many industries due to globalization
- Price transparency due to technology and empowered consumers, who can not only make complaints more easily but also amplify those complaints online
- A higher risk of litigation than previously
- Entrenched (nearly monopolistic) competitors--like Amazon and Google--in some industries, which make it close to impossible for new entrants to compete
Johnson's article is well worth a read in full to get a more complete picture of each factor, but what's your take after seeing the two cases laid out in brief side by side?
After, weighing the evidence, is it a great or horrible time to be an entrepreneur, or somewhere in the middle?