Thursday, April 25, 2013

It Has Never Been a Better Time To Be An Entrepreneur

I get many opportunities to talk with pre-entrepreneurs who are at various stages of exploration, from "I saw the Facebook movie" to "my side project is generating revenue". Something that comes up frequently in these conversations is "why entrepreneurship?" This is a very broad topic with myriad reasons behind it, and each answer is unique to the individual. However, I recently noticed that regardless of who I'm speaking with, one consistency across conversations has been commentary on why it has never been a better time to be an entrepreneur. I'm not the first person to say this and it would be a terribly depressing indication of the state of entrepreneurship if I were the last. Whatever the case, the key areas I tend to elucidate on include entrepreneurial education, startup accelerators, modern technology, channels to consumers, availability of funding, startup hubs and supportive communities, and social acceptance. Below is a brief outline of how these play into this being the best time in history to be an entrepreneur.

Over the past 10-15 years, our understanding of what goes into starting a successful business has rapidly expanded. Although our collective knowledge about this topic has emerged through several decades of academic research and practical experience, it was largely Steve Blank's 2005 book, Four Steps to the Epiphany, that opened the concepts up to the masses. His teaching led to the Lean Startup movement, which was propelled by anecdotal publications like The Lean Startup, Running Lean, and many others that followed. With the momentous spread of his teaching, Steve Blank later cleaned up the presentation of his material in The Startup Owner's Manual, which is essentially the text book on how to build a startup. All of this activity resulted in a strong base of easily-accessible knowledge on how to start and build a successful company. This is not to say that the Lean approach, which has largely been the focus of the past 8 years, is the only way to create a startup, or even the right way, but that we have made tremendous progress in the codification and sharing of information on this topic.

In conjunction with the development of knowledge around entrepreneurship, educational institutions have created curricula that is better suited for training entrepreneurs. Stanford, in particular, has been a leader in redefining how entrepreneurship is taught at universities. We have also seen the emergence of fantastic new programs like SWNext, which was enabled by Startup Weekend's unique position in the market and collaboration with amazing local facilitators around the world.

It probably goes without saying, but we have also accumulated a wealth of online resources, many of which are freely available to anyone with Internet access. There are numerous websites and blogs dedicated to educating entrepreneurs in areas as diverse as law, finance, technology, customer acquisition, and nearly any other topic one could ask for. Stanford has even started offering courses in entrepreneurship and related topics online and other academic institutions have followed suit. The vehicles for these online offerings are usually online education platforms such as Udemy and Coursera, which also host a multitude of other courses in entrepreneurship and technology.

With many thanks to Paul Graham, a fairly stable format for offering entrepreneurial training and startup acceleration has taken shape over the last 8 years. A more hands-on and rigorous complement to other educational resources, the 3-month bootcamp model he pioneered has become the de facto standard. Today, Paul's own YCombinator remains a top program along with TechStars, AngelPad, and 500 Startups. Many believe that for entrepreneurs, these programs are far superior to traditional MBA programs, particularly in light of the time required, the financial burden, and the lack of practical work involved in traditional programs. There is even a diversity of technology-, vertical-, and market-specific accelerators in most regions of the United States as well as internationally, but since many of these are newer, it remains to be seen how successful they are. In the meantime, I haven't met anyone who has regretted the experience of going through the fore-mentioned programs, so I feel like they're a pretty solid bet.

Modern Technology
Anyone up to speed on modern software practices is likely to be familiar with the availability of modern tools and will agree that it's unbelievably easy to quickly get a live web service up and running. Services like those offered by Heroku, AppFog, and AppHarbor extricate us from the nuisance of purchasing and deploying hardware, configuring infrastructure, complex deployment processes, etc. Now, we can simply code up our control logic on a framework like Ruby on Rails or Code Igniter, add a rich presentation layer using Bootstrap, and deploy via Git, all while collaborating and preserving the codebase using Github.

Don't know how to code? It doesn't matter anymore. There are a million services out there that don't require any experience writing software. You can create a sign-up page using Launch Rock, a store front using Shopify, and pretty much anything else you can think of. One limitation that stands out is the creation of mobile apps due to app store policies, but mobile web is unrestricted, so it's easy enough to create a mobile-optimized website instead of a native app.

For those more technically inclined, the world of open source has grown at an explosive rate, thanks to public code hosting services like Github and CodePlex. It's easy to nab code for nearly any flavor of indexing, caching, load balancing, data processing, and so much more. There is some unbelievable stuff freely available because developers want to share their work and allow others to benefit from it. There's an API for almost everything from payment processing to mobile backend as a service. Most of these services have a free offering for minimal levels of consumption.

Don't get me wrong - the solid engineering required to build a robust product takes great skill. But there are so many tools available that most of us can get much farther, much faster, and with much less domain-specific knowledge than ever before.

And let's not forget about physical products, which have largely been back-of-mind since the tech boom in the 90's. Just like web services, physical products are getting easier to create as well. For $25, you can buy a pocket-sized Linux server (Raspberry Pi) or easy-to-program microcontroller (Arduino). You can create physical objects in hours or even minutes using 3D printers like those sold by MakerBot. Too expensive? Head over to one of the many local shared spaces opening up like Seattle's MakerHaus. What these machines are capable of vastly reshapes the limits of our creativity.

Channels to Consumers
What difference do all these technological innovations make if we can't reach consumers? The whole world is familiar with social media tools like Facebook, Twitter, Pinterest, and others that make it easier to build a following and distribute content. We also have channels like eBay and to get our products in front of existing, active consumers. For our web services and apps, we have app stores on every mobile platform and at least one store for browser extensions, Google's Chrome Web Store. To access new customers, we can get substantial reach using Google's Ad Words or Facebook Advertising. The best part about modern online advertising is that every platform I'm aware of allows us to target specific user profiles so we get our message in front of the particular audience we're targeting.

Aside from marketing and sales, these tools can be used to validate our ideas against our target customer segments. When we put out an ad and no one clicks through, or no one converts into a paying customer, there's a good chance something was broken about our business model, whether the customer segment we were targeting, the value prop we were offering, or something else.

The ability to reach people for the purpose of market validation is worth elaborating on. There are a plethora of tools like Mechanical Turk, aytm, and Google Consumer Surveys that help you get copious amounts of feedback more quickly and at a lower price point than traditional means. Of course, it's also good to jump on services like LinkedIn and WhitePages to drum up direct leads. We don't want to get lost in the technological wonderland that surrounds us and forget the importance of sending email, making phone calls, and hitting the streets for in-person conversations with customers.

Availability of Funding
Immense change has occurred in the past few years around financing for startups. Naturally, angels, angel groups, and VC firms are still around, but we've also seen the rise of super angels. Likewise, alternative sources of funding are available such as the revenue-based loans offered by Lighter Capital and crowd-funding platforms like Kickstarter. Just like there are new ways to reach consumers, there are new ways to reach investors. Angel List facilitates entrepreneurs' abilities to connect with angel investors to raise financing.

A new development worth keeping an eye on is the passing of the JOBS act last year. While we're still waiting for the act to be implemented by government, numerous companies like Fundable aren't waiting. You can put your startup's profile on their platform today. We can expect many anticipated and unanticipated challenges in this area, but I am eager to see how it shakes up the world of entrepreneurship over the next two years and beyond.

Startup Hubs and Supportive Communities
Startup hubs are growing organically in nearly every major city in the world. Most of these hubs have champions who are deliberately driving the growth of the tech and startup communities within them. Outside of Silicon Valley, cities like Seattle, New York, Boston, Austin, Colorado, and Chicago have thriving communities of entrepreneurs and the resources needed to support them. Each of these cities has accelerator programs, great universities producing tech and talent, and extensive availability startup-oriented services.

I can't speak in depth about other startup communities, but Seattle's is extremely supportive. Community members want you to win and most are willing to lend a hand in one way or another to see that you get there. While there is competition among the companies here, the general consensus is that success in our community is a benefit to all of us.

Social Acceptance
Entrepreneurship may not have been widely accepted as a productive career path prior to the 90's and it may have had some bad stigma after the eruption of the Internet bubble in the early 2000's, but from day-to-day conversations I'm having today, I'm finding that people living completely outside the startup orb have some familiarity with and appreciation of entrepreneurship and those pursuing it. Of course, most people don't understand the mindset of an entrepreneur or what an entrepreneur goes through to build their business, but fortunately, our supportive startup communities help us to cope with the emotional challenges of entrepreneurship.

So, What Are You Waiting For?
Hopefully this has provided some valuable food for thought. For those who are on the edge of exploring entrepreneurship, I strongly encourage further exploration. Talk with friends working at startups, try going to Startup Weekend, or get involved in the startup community in some other way. If you're ready to take it a step further, go work for a startup. And if you've done your homework, have the right risk profile, and are ready for an amazing roller coaster ride, go for it! It's never been a better time to be an entrepreneur.