Friday, December 20, 2019

10 Positive Signs For Starting Your Own Business Now

startup-nowWith the current strong economy I’m seeing a continued resurgence of entrepreneurial spirit, and more startup activity than ever before. I believe the days of the “job work” mentality are thankfully waning, with more people looking to get satisfaction by making the world a better place, rather than just tolerating brain-numbing work to fund enjoyment elsewhere.

According to current Kauffman Indicators of Entrepreneurship, the share of new entrepreneurs who started businesses to pursue opportunity rather than from necessity now exceeds 86%, more than 12 percentage points higher than ten years ago at the height of the last recession. In addition, young businesses that are still active after one year continues to hover at nearly 80%.

There is additional encouraging news for aspiring entrepreneurs on many fronts, just in case you are thinking about joining the existing ranks:

  1. Valuations of successful startups have hit an all-time high. An unprecedented number of startups, 427 at last count, are now valued above $1 billion, according to CB Insights. Three of these, JUUL Labs, Didi Chuxing, and Toutiao have already passed $50 billion. Thus a record number of entrepreneurs (and team members) are getting rich.
  1. Initial Public Offerings (IPO) are back as an exit strategy. Statistica reports that almost 20 percent more companies went public in 2018 versus 2017. The median deal size is back over $100 million. Investors are showing an increased appetite for new stocks, with a good percentage of deals pricing above the marketed share price range.
  1. Funding for early-stage startups is more available than ever. Last year 300,000+ American angels invested an estimated $25 billion in more than 70,000 startup deals. Crowd funding is setting new records worldwide, with $17 billion from North America alone, and VCs poured another $100 billion more into small growth companies last year.
  1. Cost of entry for a startup is at an all-time low. I can remember when creating a web site for eCommerce could easily require a million dollar investment. Now you can create a web site for almost nothing - and be on your way with your latest invention or personal services. Smartphone apps can be built for less than $10K, so who needs an investor?
  1. Startup incubators and accelerators are popping up everywhere. Business incubators were all the rage before the dot-com bubble (700 for profit, many more non-profit). After the bubble burst and the recession, more than 80% of them disappeared. Now they are back in every community, with the best even waving money at graduates.
  1. The world is a now single market, both homogeneous and heterogeneous. Entrepreneurs now can think globally about the opportunity, from day one but start locally. This approach, popularly known as “glocalization,” means you design and deliver global solutions that have total relevance to every local market you plan to attack.
  1. Social media is a boon for entrepreneurs and startups. With the key social media platforms today, an entrepreneur can tune a product, build a brand, and grow the business with very low cost and a high interactivity never before possible. The elements include communications, mobile platforms, and location-based services.
  1. Large corporations have lost their ability to innovate. Conglomerates, which were the engines of growth and vitality in the twentieth century, have proven themselves unable to innovate, and have a tarnished public image due to financial woes and poor management. Most now routinely buy startups for new technology and new products.
  1. Women are a growing force as entrepreneurs. According to the latest Women’s Entrepreneurship Report, overall female rates have continued to increase and the gender gap has narrowed. Women inherently should have an advantage, since women already control over 70% of household income and $20 trillion of consumer spending.
  1. Baby Boomers are joining the fun in record numbers. The percentage of startups created by entrepreneurs between the ages 55 and 64 continues to grow more than any other age demographic. Driving forces include their need to work and stay energized for the longer life expectancies, as well as the opportunity to give life to long-held dreams.

Looking ahead, Forbes predicts that in 2020 the supply of VC money will still be quite robust—with over $100 billion in investments across more than 10,000 deals. They also suggest that a business valuation discipline has returned to the Valley. The investment thesis has shifted from “growth at all costs” to “growth with fundamentals.”

The image of an entrepreneur is at an all-time high, so why would you continue to work in a job that you hate, or provides no satisfaction? Step into a new entrepreneur era where the definition of “work” is something you love. It’s never too late to start, but don’t forget the fundamentals.

Marty Zwilling

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