Start-Up Cycle

Day 21 – October 22nd

After living in the bay area of California, it can seem like there are successful startups around every corner. Indeed, as many of my reader know, I am bootstrapping one myself that solves a tangible and meaningful problem. I promise I will go public about that soon, but until then, it is good to get the pulse on what the current ecosystem is for startups.

Though many startups have come, acquired seed funding, and have been erased from memory, we all can remember a time when Amazon, Facebook, Airbnb, Uber, Instagram, Twitter, etc. were all considered to be startups. Now they are considered some of the most valuable companies in the world and not startups at all, but the behemoths that will prevent startups in the next 5-10 years from accruing much power or interest, according to Jon Evans a columnist for TechCrunch. Read his article here.

He believes that after the web boom and the smartphone boom, big titans were created and that now, those same big titans will phase out startups in the next 10 years. Additionally, he states that in the past, a few kids in a garage could write some software and get rich, but that time is passed and now those kids will likely be workers at Google or Amazon and not entrepreneurs themselves.

I disagree. As any market gets bigger and more saturated, it is naturally going to get harder to break out of the mold and rise to the top. However,  to say definitively that the era of startups is over is, I believe, a little shortsighted. I think that there will always be people who recognize a market failure or sub-optimization, build and test a product/idea to see if that improves on the market failure, and quickly can bring it to market. And with newer and more accessible technologies out every day, a small startup can act much quicker than the big behemoths.

I believe that the main differentiator in the startups of 2007 and the startups of the next 10 years will be that they might not try to revolutionize or create industries, but they might try to supplement them. No new concept of a search engine, or car share service, or personalized deliveries, but concepts that make the quality of life under those technologies better.

Obviously as someone in the space, I draw a different conclusion than Jon does and may be biased due to the circumstances. Though it may get harder to standout as a revolutionary startup, there may even be a bubble forming right now in the tech industry, but I still believe there is space for new and exciting startups to emerge and solve market issues.

Until Tomorrow!

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