Thursday, January 06, 2011

Why This Is A Golden Age For Entrepreneurs Who Follow This Approach

This is a golden age for entrepreneurs--if you build a sustainable business.

The costs of starting a business are lower than ever before.

Social media makes it easier than ever to spread word about great products and services (note that I said easier, not easy!).

There's more transparency in the startup ecosystem (AngelList, VentureHacks, HackerNews) than would have seemed possible 10 years ago when, I kid you not, we looked to places like Red Herring for advice.

But there also downsides to today's environment.

Tons of companies are getting funded, which means competition and pricing pressures, not to mention general noise in the market. And with major exits few and far between, it's tough to make money if you raise more than a few million dollars.

The key to success in this environment is to build a "real" business in a capital-efficient manner.

It's never been easier to raise seed funding. You can cut through the market noise by providing a useful product and through the funding noise by demonstrating revenue traction. You can make your seed funding (which is easy to come by) last, and exit profitably for millions or tens of millions rather than rolling the dice on raising a larger round and achieving a nine-figure outcome.

If you think you can follow these lessons, and you want to be an entrepreneur, start now. There's never been a better time.


Richard said...

Good advice, the less money and the less stringent and restrictive the terms of the investment the more time you can spend on the business, and the less time justifying decisions and engaging in the necessary politics.

Paul said...

"It's never been easier to raise seed funding."

And you even emphasize it by saying again "You can make your seed funding (which is easy to come by)..."

I must be doing something horribly, terribly, incredibly wrong ... because my failure to secure seed funding is absolutely, positively, without question, not because there's something wrong with my devious plan - which is akin to having a money printing press in the basement and printing wads of cash 24/7.

John J. Walters said...

Paul, if your plan is as good as you say, perhaps you should talk to Chris or TK...

Paul said...

Hey John,

Thanks man,

Chris and I go way back and he's aware of my devious plan to make a bunch of cash. He's actually been a great champion and tremendous help many times throughout the years and I've been honored to be able to call him a friend.

I don't know TK, however if Chris felt TK was someone I needed to speak with concerning this particular project, I'd be happy to.