I spend a lot of time traveling and talking to aspiring entrepreneurs. And I'd estimate that nine out of 10 of them are starting Web-based businesses.
They're launching websites because they think it's easier, less expensive, and less risky than starting a traditional business—by which I mean one that requires direct physical contact with customers. What's more, most of these would-be entrepreneurs have full-time jobs and are pursuing their new ventures on the side. The start-up capital comes out of their savings. They figure that if they fail, they'll be out a few bucks, but their main source of income will be safe.
This is new. My audiences used to be filled with people who had raised, or were planning to raise, substantial sums to launch businesses to which they would be devoting every waking minute. They'd have to, because the price of failure was so steep. They were justifiably nervous about the risk. Many of them experienced what my late friend Wilson Harrell called "entrepreneurial terror." Nonetheless, these entrepreneurs went on to create the companies that have fueled the U.S. economy for 30 years.
I don't deny that it's easier, cheaper, and less risky to put up a website than it is to open a store, manufacture products, or provide a service to customers. At the same time, however, driving traffic to a website and turning visits into sales are other matters. Few of the would-be Web moguls I meet have figured out how to do these things. Most, I suspect, never will.
But there's another reason I am troubled by all these part-time, Web-based businesses. It's precisely because they are less difficult, less expensive, and less risky. When you've scrounged up every last cent and put it all on the line, success or failure becomes a matter of survival. Your instincts become sharper. You approach problems with a totally different mindset. If, in your part-time Web business, no customers show up for a week or two, you can take your time finding a solution. In a business you depend on for your livelihood, you have to come up with a solution immediately. I realize that there are many Web entrepreneurs who make that kind of total commitment to their companies. But my sense is that they are a minority. A decade ago, nearly every aspiring entrepreneur I met was 100 percent committed.
I hope I'm wrong. If I'm right, it could be very bad news for our economy.