Not So Easy

Matthew Goldman -

Today I heard a statement that I am hearing frequently: "It's easier than ever to start a business."

This statement is usually followed by some discussion of how great Amazon Web Services is or the cloud in general. The concept is that instead of spending lots of money buying servers and setting up computers, you can now simply hook into the cloud.

Ta-da. You have a business.

I'm calling bullshit.

Starting a business is definitely not about how expensive your hosting environment is.

I agree:

  • AWS makes life easy
  • The cloud is great
  • We no longer have to spend lots of money on buying expensive server equipment
  • We no longer have to drive that equipment to the data center
  • We no longer have substantial capital expenditures
  • There are many more tools available

What these things do is not make it easy to start a business. They make it easier and cheaper to write software.

Many businesses are software-based, and all modern business use software.

That doesn't make it easy.

You need:

  • A good idea
  • A great team
  • A go-to market strategy
  • Efficient acquisition
  • Impeccable timing
  • A fantastic product

There is no doubt that many aspects of starting a software technology-based business is easier and less expensive than before. I remember driving Sun Microsystems boxes to a data center. It was not great.

There are many other factors, especially right now at the top end of an economy that is making new business creation harder:

  • Low unemployment leading to high wages (especially in tech)
  • Expensive real estate (especially in tech centers)
  • Expensive acquisition (due to the massive amount of competition)

There are thousands of amazing technology-driven businesses out there, many with millions of dollars in invested capital behind them making things very challenging.

I won't go so far as to say that it's harder than before to start a business. I think each era has its unique challenges.

I will say that it is never easy to start a business. The true entrepreneur, whether in a high-growth technology-driven startup, or the woman down the street starting a car repair business, has to sacrifice time, money, health, relaxation, and more to get a business of a ground.

Starting a business is always hard. That's OK.

Starting a tech-driven business right now might be less expensive thanks to the cloud.

That's OK, too.

If you're an investor who doesn't operate, please don't say that it's easy. You're welcome to try it and see what you think.