An old adage suggested that there were 1,000 new startups formed in the US every year and that 90% of them would fail. But modern technology means that both these figures are likely to be redundant. Not only do more people form businesses than ever before, but many of them are tech-based, which means they can be created with just a laptop and internet connection. But is it easier or harder to succeed as a startup now than it was a few years ago?
Is Business Easier Today?
Some people would argue that it’s far easier to succeed in a tech business today. Not only is the world designed to further tech infrastructure, but socially and culturally tech start-ups are revered. AirBnB and Deliveroo show that innovative tech companies can come from simple ideas and limited (no) stock, while those dismissed for being involved in Bitcoin just 10 years ago are not deemed to have been intuitively clever. The world looks favorably on tech entrepreneurs.
The existing frameworks that businesses can tap into and license mean that innovative tech companies can actually succeed without huge development costs that they might once have had to deal with.
For instance, the online casino industry shows this with companies such as Pronet Gaming – https://pronetgaming.com/ – providing a unified platform that casinos can adapt to form businesses and tailor to specific customers. Similarly, website builders Wix – https://www.wix.com/ – and other drag-and-drop websites mean that e-commerce sites can be formed easily without business owners spending money on websites up front. Online retailer platform Etsy – https://www.etsy.com/ – helps unique small businesses sell their homemade wares and clothes. The built-in audience is beneficial to smaller businesses who won’t have such a readily made customer market.
Social media and the internet mean that starting a business can be done from home. Many people have tried to monetize their hobbies – selling vintage clothes, creating homemade products, or even performing necessary tasks such as accounting. Businesses are no longer restricted to just touting for work in their local area or being attached to a Chamber of Commerce. Virality on Twitter and Instagram means that someone’s small business could skyrocket in popularity and sales overnight.
Is Business Harder Today?
But this actually also contributes to making it harder to succeed in business now. While it may be easier to set up, it’s harder to stand out if so many people are also offering similar things. Despite the positive sentiment around people like Elon Musk for making a go of it with Tesla, most people do tend to dismiss tech creatives. The whole point of a success story is that it represents an exception, not the rule.
Socioeconomic issues also make startups difficult. It depends on the target audience. Some people have seen their income increase in the past five years, so they may have more money for larger purchases. Those who may have treated themselves to something smaller could have seen a drop in their disposable income. Business exists in the economic environment and this plays a role in how successful a tech startup is. Tech startups focus on business ideas that are universally useful to everyone – such as Calm, the mental wellbeing app, and AirGarage, the parking real estate app.
Statistics gathered in 2016 estimated that around 66% of startups succeeded in the first two years, while 50% succeeded by year five. Given the leaps in technology since them – along with some challenges – we could expect more businesses to succeed today than they could just a decade ago.