It has never been easier or cheaper to start a company that can grow to scale. Thanks to open-source software, social media platforms, broadband penetration, and--not least--the efforts of innovators like those featured on this month's covers, the cost of launching a tech business has plummeted by 90 percent or more since 2000. To us at Inc., the democratization of the startup is an almost unreservedly great thing.
The "great" part of it is easier to explain than the "almost." Flooding the economy with creative startups raises the chance that real breakthroughs will happen, get funded, take root, and ultimately make life better for everyone. Look at the green shoots of innovation emerging from deep within the Affordable Care Act, as profiled by Inc.'s San Francisco bureau chief, Jeff Bercovici. If successful, companies like Honor and Grand Rounds could help slow the rampaging inflation in health care costs; it's hard to imagine a benefit that would do more for Americans.
Then there's the personal angle. Our country's founding document, after all, defines the pursuit of happiness as an inalienable right. What better enhances that pursuit than lowering the barriers that can keep creative people from getting their dreams off the ground?
So why the reservation? Because the idea that anyone can launch a company feeds the illusion that building a company is easy. Launching is one thing. The real work of entrepreneurship comes with sustaining--meeting payroll week after week, hitting growth metrics, expanding without a cash squeeze, and growing yourself as a leader. And that is very hard, indeed. In his book Thinking, Fast and Slow, Nobel-winning economist Daniel Kahneman has admiringly cited a study suggesting that governments cease encouraging entrepreneurship. Since most would-be company builders end up disappointed, that study reasoned, citizens will be happier overall if fewer try to become entrepreneurs.
We at Inc. wouldn't go that far. To repeat, becoming an entrepreneur has never been easier, and that is a great thing. But succeeding as one remains amazingly difficult, and if you are taking the plunge because you believe entrepreneurship has suddenly become an easy and cost-free path to fame and fortune, you are kidding yourself.
"The bad news is, the data show you will almost certainly fail," warns Phil Libin, co-founder of Inc.'s 2011 Company of the Year, Evernote, and now a managing director at General Catalyst Partners. "The good news is, if you aren't afraid of failure, and want to start a company for the right reasons, there has never been a better time to do it."