It's not your grandmother's entrepreneurial environment anymore. For today's entrepreneurs, the prospect of starting a business is fraught with new forces.
These new forces don't simply make the game harder to play. They've changed the game altogether. Here are the forces that today's entrepreneurs must deal with.
1. There are more founders than there are designers and developers.
Founders are a dime a dozen. This doesn't mean that founders are any less valuable, less special, or less awesome. It simply means that there are a lot of founders.
Naval Ravikant, co-founder of AngelList and a smart investor (think Uber), put it this way:
There isn't a shortage of developers and designers. There's a surplus of founders.
In recent years, the barriers to entry for entrepreneurship have lowered, talent has increased, and technological skill has become ubiquitous. The merging of these streams has created a swift current of founders who possess passion, drive, and the ability to make things happen.
One positive effect of this trend is that more women and minorities are forming businesses and having influence. The challenge is that as more founders enter the arena, the less likely their businesses are to succeed. It's a simple numbers game, and the slim chances of success are slimmer than they've ever been.
2. There are fewer industries to disrupt.
Once upon a time it was popular to be a "disruptive" entrepreneur--to create a startup that punched the status quo in the face, tore down tradition, and smashed paradigms to smithereens.
Today, nearly every industry has been disrupted. I'm not necessarily speaking of Uber-style disruption, but rather the nature of technological disruption. Technology has disrupted every industry.
If you want to really "disrupt," it must happen at a systemic level, not a technological level.
3. There's no such thing as a "tech" company anymore.
Mark Zuckerberg said,
It's really no longer "tech"--it's simply modern living.
It's a cogent observation that has ramifications for startups. Our industrialized culture is so saturated with tech, that one does not merely start a "tech company." It has to be tech and something else.
Modern living demands technology, and a successful startup must by necessity be a tech company. But it has to be more.
The startup news circuit has been recently bombarded with the announcement that liberal arts degrees are "tech's hottest ticket." Slack CEO Stewart Butterfield is the poster child for the philosophy-major-turned-startup-maven, thumbing his nose at Silicon Valley's "cult of coders."
The news angle isn't quite accurate. It's not that liberal arts majors are taking over Silicon Valley. Rather, it's that the culture at large is becoming Silicon Valley. The fact that a philosophy B.A. is occupying the corner office at a "tech" firm is an indication of the fact that tech and business are morphing into one.
There are no longer "tech" companies. There is business, and it has to be techy.
4. Growth hacking isn't just a good idea. It's the only idea.
Growth hacking used to be a buzzword. Now, growth hacking is marketing de rigueur.
Startups don't have the option of marketing any other way than the way of innovation, creativity, push tactics, and product tactics.
Startup marketers are numbers-driven, process-oriented, and data-conscious. You can't successfully hack growth without knowing how to select the right KPIs, measure those KPIs, analyze a conversion funnel, conduct split testing, and assess your viral coefficient (K).
5. Your personal brand matters.
I don't invest in companies. I invest in people.
Though it's cliche, it's true. Investment isn't only about hot-shot businesses with shiny new toys. It's more about the founders--people, personalities, dispositions, and talent--who form the hot-shot companies, design the shiny toy, and turn that dream into reality.
Founders matter, and that's where your personal brand plays a critical role in your startup's success. If an investor doesn't know you, doesn't respect you, and doesn't see any validity in your endeavor, he's not going to invest in your company.
You must build a personal brand that commands respect and engenders trust.
A large part of this personal brand involves gaining mentorship. Mentorship allows you to share the personal brand legacy of someone else, giving you a greater degree of trust.
6. Funding has changed.
The era of startups chasing big funding is over. Sure, every startup wants the deep-pocketed investors, angel groups, and venture capital money. But this level of funding is harder and harder to secure, especially in a startup environment that is packed with contenders.
What's the wind of change in funding?
It comes from crowds. Kickstarter, GoFundMe, and Indiegogo are bringing in millions of dollars for scrappy startups. The large funding sites have spawned dozens of other crowdfunding sites, each with its own angle, target, and unique twist.
Traditional funding is hard to get. But so is crowdfunding. It takes creativity, marketing prowess, and a whole lot of work to get money, no matter where you look for it.
Incubators and accelerators have added a new twist to the funding saga. Startups that come from such programs have a greater likelihood of success, plus first dibs on funding resources.
The startup environment has changed, but the startup world, true to character, is taking it in stride.
Your success as a startup founder depends upon your ability to be flexible and resilient. The forces that are reshaping entrepreneurism are your opportunity to showcase what you're made of.
What other forces do you think are changing the entrepreneurial game?