Wednesday, September 07, 2005

Why it's such a great time to be an entrepreneur

Joe Kraus was a co-founder of Excite.com, one of the first international Web portals. He’s now working on another startup, Palo Alto-based JotSpot, the first application-wiki company. (If you have to ask, you’ll never understand it.)

Joe’s a pretty slack blogger – he hasn’t posted since June 29. But what he has to say in his blog, Bnoopy, is pretty cool. Here’s why he believes “It’s a great time to be an entrepreneur.”

There’s never been a better time to be an entrepreneur because it’s never been cheaper to be one. Here’s one example.
Excite.com took $3,000,000 to get from idea to launch. JotSpot took $100,000.
Why on earth is there a 30X difference? There’s probably a lot of reasons, but here are my top four.
Hardware is 100X cheaper.

It’s two factors – Moore’s law and the rise of Linux as an operating system designed to run on generic hardware. Back in the Excite days, we had to buy proprietary Sun hardware and Sun hard drive arrays. Today, we buy generic Intel boxes provided by one of a million different suppliers.
Infrastructure software is free

Back in 1993 we had to buy and continue to pay for maintenance on everything we needed just to build our service -- operating systems, compilers, web servers, application servers, databases... Today, free, open source infrastructure is the norm. Get it anytime and anywhere.
Access to Global Labor Markets

Startups today have unprecedented access to global labor markets. Back in 1993, IBM had access to technical people in India, but little Excite.com did not. Today, with rent-a-coder, elance.com and just plain e-mail, we have access to a world-wide talent pool of experts on a temporary or permanent basis.
Search Engine Marketing changes everything

Ten years ago to reach the market, we had to do expensive distribution deals. We advertised on television and radio and print. We spent a crapload of money.
It’s an obvious statement to say that search engine marketing changes everything. But the real revolution is the ability to affordably reach small markets. You can know what works and what doesn’t. "


Joe believes these enduring advantages ensure that more people will become entrepreneurs than ever before. After all, he says, “a lot more people can raise $100,000 than raise $3,000,000.”

It’s also a great time to be an angel investor, he adds, “because there are real possibilities of substantial company progress on so little money.”

For the whole story, click here.

No comments: