Launching a startup these days has never been easier — and more difficult. Easier because there is a lot more money available from a multitude of sources, than in times gone by, to put together and launch a business idea. Plus, the cost of entry — and barriers to entry — are significantly lower, thanks to relatively cheap cloud computing resources that provide enterprise-class computing on demand, along with social network that provide the ability to instantly connect with customers and markets at virtually no cost.
However, that doesn’t mean launching a new venture doesn’t mean hard work and sacrifice — it still does. But more energy needs to go into finding the right people with the right skills to make the business stick. Cloud and information technology may lower the barriers to entry for new ventures, but it now takes a blend of tech-savvy and business-savvy know-how to deliver positive results.
Funding — there’s an app for that. First of all, funding is no longer the biggest issue for a startup. New avenues, such as crowdfunding, offer ways to get around banks and venture capitalists and go right to large collections of smaller investors.
New online ventures are also are making the process almost as simple as applying for a mortgage online. Romain Dillett of TechCrunch, for example, just reported on the expansion of online lenders such as Biz2Credit, which just launched an app that further ” simplifies the process greatly by removing the need to contact different institutions. With the new iPad app, companies can even get a credit score from Dun & Bradstreet in minutes. By partnering with 1,100 lenders, companies can get a clear view of their options and secure capital easily. So far, Biz2Credit has provided $750 million in loans.”
The right people — there isn’t an app for that yet: Finding talented people to run a startup is reported to now be the greatest challenge, more so than funding, some observers report. In a new ReadWrite report, authors Tim Devaney and Tom Stein spoke with Naval Ravikant, founder of AngelList, who disclosed the results of an informal survey conducted among entrepreneurs, which found finding talented people with the right skills now surpasses funding concerns:
“‘In the past, funding was the biggest need but today it’s recruiting,’ says Ravikant. After recruiting comes funding, then advisers. ‘That’s followed by social-media marketing and press, which really is another way of saying, ‘We need lots of customers.’ After that comes cofounders, which is really interesting.’ Interesting because, although cofounders is halfway down the needs list, the fact that it’s there at all is yet another indicator of how difficult it now is for startups to bring talent onboard.”
Since the barriers to entry are now so low for many new startups, expect too see a proliferation in small-scale startups. As a result, there will be a scramble of competition for talented partners and employees as there is for customers.
And this competition won’t be limited to start-ups and small businesses — large organizations will need to find ways to retain their talent, many of whom will be attracted by the lure of the startup culture. For many enterprises, the challenge will be how to design compensation programs that will help them keep valuable employees. Part of this package may be to enable greater entrepreneurship — or startups — within the walls of existing organizations.
(Photo: National Science Foundation.)