Building a startup is complex. There are in fact many many challenges but one of those challenges i.e. the cost of product development has already reduced by leaps and bounds over the last decade. Even the distribution costs of web and mobile apps have dropped due to the leverage, that platforms like Facebook, Twitter and the various app stores, are giving to upcoming startups.
We are now seeing billion dollar startups get created faster than ever before.
But not just internet startups, even crazier, investment heavy startups for space exploration are starting to seem like a viable, feasible business model.
Some changes have been happening at a fundamental level in our startup ecosystem for a while, and more so in the last give years. I am going to put my neck on the line and claim that the impact of these changes is far greater than is noticeable today. In fact the startup ecosystem is now poised for a hockey stick growth and the results will start to be evident in the next five years.
What does hockey stick growth for the startup ecosystem even mean ? 10x more startups than today in five years from now
There are five fundamental aspects that are now nearing a critical mass to drive the hockey stick growth of the startup ecosystem.
1. Expanding organizational / mentoring support for startups: The top accelerator programs have now crossed 1000+ startups total and are playing around with expanding batch sizes. This is happening even more in China and the top accelerators will reach a level in five years where they are each rolling out a 1000 startups annually. Organizations build the ecosystem; we will soon reach the critical mass for on ground organizational support and cause a real spurt in the number of startups getting launched.
2. Easier access to capital: Platforms like AngelList through the concept of Angel Syndicates etc are democratizing the funding process at the early and more important stages of the startup ecosystem. Funds for startups are now more readily available even up to $1M investment levels. Combine this fact with the decreasing cost of building product /company and you will see why the number of startups coming up will greatly increase.
3. Lesser friction in distribution (customers by the thousands in advance of product launch): Kickstarter is enabling success stories like the Pebble watch and making distribution easier even for physical products. Product discovery as a problem is ofcourse not completely solved yet but startups like Product Hunt are at it.
4. Disruption of traditional industries: The automobile industry (Tesla), hotel industry (AirBnB), the travel industry (Uber, Driverless Google cars), the grocery retailing industry (InstaCart) and even venture capital industry (AngelList) are now under serious threat of disruption. This in turn gives a boost to investors (entrepreneurs always have) to boldly go where no one has gone before. No industry is sacrosanct anymore from disruption by startups !
5. Increased Exit Options: More startups are quickly reaching billion dollar valuations, which implies that they are open to acquiring other smaller startups with an eye on team (acquihires) or product and technology. Apparently the going rate for acquihires in Sillicon Valley is $1M per developer. But increased exit possibilities make it even more attractive for people to startup.
And one more thing.
We at Uberstarter are super excited to do out bit to drive the hockey stick growth for the startup ecosystem. It has been a year long exercise for us to figure things out and capture the goodness of Lean Startup, Customer Development, Business Model Generation and Lean Canvas inside software and make it much easier to adopt this knowledge by startups. Many thanks to Steve Blank, Eric Ries, Alex Osterwald, Ash Maurya and others who have written on these topics extensively. But now we are almost there, and ready to share with you our still very buggy software which will help to Speed up Startups !
Please check out our Alpha release.
We will love to have feedback from you, just email vishal @ uberstarter.com
This is the begining of a new era. Before the robots take over the world, the startups are going to run amock... fingers crossed !