Good Time To Be A Start-Up?

Thursday 5th March 2020 Dave Sharp Start Ups!

Personally I'm never convinced that there is a good or bad time to start your own business. Recessions are bad but often make for good start-up conditions (cheap rent, grants, loans, start-up incentives). Economic booms mean customer(s) spending in large amounts but the infrastructure costs can rise. Its a discussion that comes up frequently but I'm not swayed either way.

Lets look at some of the reasons why now (April 2020) might not be a bad time for that tech start-up idea you've been mentally developing:


The culture-shift in society towards entrepreneurial activity means that there is more acceptance than ever about being your own boss, being a start-up and being a crazy entrepreneur type. There is no stigma or negativity in doing your own thing, conversely its become interesting and cool to be running on near-zero money and doing something risky. Society went from being risk-adverse to risk-rewarding in a very short period of time but its a shift for the better.


In 2020, the cost of hardware to power a world-wide web solution start-up has come down by a factor of 100 coimpared to 1995. Long gone are the days of having to buy bespoke hardware solutions from companies like Sun or Oracle at ridiculous prices. Linux solutions will now run on cheap hardware making scale costs far more tolerable to the masses.


You just don't need to build from scratch any more. Infrastructure has gone from something that you bought or licensed to being completely free of cost. Linux, Apache, MySQL are all examples of infrastructure that in years gone by the costs would have hung large over a start-up. Open Source as a mentality has taken away a massive barrier to getting going. Cloud computing isnt free, but does provide 24/7/365 availabiity for your new business and a world wide reach.


Business planning and development now takes days and weeks not weeks and years. In fact its possible to get a business live in a day but I would be sceptical of something born so quickly. As a new entrepreneur there are a plethora of boot-camps and hack days that will give you a rapid start over the course of a weekend and can lead your new business from nothing to something in a month or less. Historically this took years and was a huge barrier for a lot of would-be entrepreneurs.

Going Global

Globalisation has helped in a number of ways. The labour market is now anyone in the world that has the skills you need and understands what you're aiming for - not who you could find in your local environment and making do with what you could find. The gig economy works well for software/tech development and there are amies of freelancers who can provide what you need at short timescales.

Equally, your sales market is now also global in nature, if your product is digital then the whole world is your market size.

Both of these have negatives attached to them but in general I see both of them as being 90% positive in nature and helpful to a new start-up.


One of the most positive things for new start-ups is the widespread availability of mentors. These are people who have lived the life your heading for, succeeded, failed and moved on to the next idea. There really is no substitute for experience and a good mentor will be able to help you avoid the common mistakes. You'll probably make a whole new set of new mistakes bespoke to the idea your developing, but you should be able to avoid the run-of-the-mill errors that can plague a new start-up.

Search Engines

30 years ago the world operated around sales and distribution agreements. You needed someone to do something in their locality that meant that potential customers got to see the thing you made and help them make a purchasing decision. Pre the Internet there just wasn't any option to reach customers directly in a cost-effective way.

Search Engine Marketing (SEM) is now everything when it comes to potential customers/users on-boarding to your new start-up venture. A good SEM strategy can bring millions of potential users/customers to your door and can do it on a cost basis that has never existed before. Get your SEM wrong and of course you won't get much for your money. Get it right and you could be heading from zero to hero in a fortnight. All the best tech businesses are the ones with the best SEM strategies.


There are a lot more active angels investing now than ever before. The UK government has recognised this by actively bringing in tax incentives such as EIS, SEIS and Entrepreneurs Relief. This means the number of people writing £80k seed fund cheques to entrepreneurs has increased massively. For the budding entrepreneur it means a small army of people to talk to about the next funding round to get your business pumping - 15 years ago, even 10 years ago this didn't exist.


The tech sector is sensitive to its past. The era of the 90's left investors everywhere (with the exception of Warren Buffet) with a bitter taste in their mouths over unprecedented levels of investment amounting to very little. Its hard to look past, as an example. $160 Million of VC cash produced very little. Bootstrapping now means that tech companies have a verified method of getting to the first pound of revenue on very little cash. Investors accept this as valid and most tech start-ups can use this method as part of a structured business/investment plan.


If you're keep wondering if now is the right time then you're probably never going to commit and start. You can wait and see how the business landscape develops over time but as one factor changes positively I can guarantee that some other metric is changing negatively - its just the way things work. Many would-be entrepreneurs (commonly refereed to as Wantrepreneurs) fail to take the first few steps on the hope that something is going to fall in their lap that will make things safe for them - if this is you then you need to look elsewhere, start-up life isn't for you.

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