As many tech startup actors have noted for over a decade: starting a company has never been easier—especially one with a 100% digital offer.
Progress has been made in various fields to make it happen (the internet, online payment, the cost of hardware, fewer bureaucratic hurdles, more venture capital). Still, the most influential development undoubtedly comes from cloud computing.
As a result, launching a digital service now costs a fraction of what it did only two decades ago. Seed money that used to go to the acquisition of servers can now be used to test your market faster and longer. (Some will argue that most of that cash now goes to pay for outrageously high developers’ salary and office rent, especially in hot tech areas.)
Starting is easy.
However, as Wilson notes in this 2017 post on his acclaimed avc.com blog:
“The one thing that has not gotten appreciably easier in the last decade is finishing.”
Startup exits come in the form of a sale, a public introduction, or—people tend to forget it, despite it being the most frequent form of exit—a liquidation.
As Wilson notes, it used to be that a larger tech company would “acqui-hire” your employees if your startup didn’t develop as planned, offering some consolation. Alas, it is not happening as often as in the past.
The direct consequence is that it’s become harder to exit. Founders need to demonstrate more growth potential, and their early-stage financiers need to be ready to stick with their investment longer.
It stands to reason that, as the cost of starting has decreased, the minimum bar to get acquired would go higher: you need to stand out among the crowd; it’s become easier for your competitors to launch, too, and they may be anywhere in the world.
🗣Do you agree? What is the most difficult step to reach in the life of a startup?
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🔗 Fred Wilson’s post is here
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