I hate these kinds of blog posts, because they make it sound like starting a business isn't about risk or hard work anymore. Supposedly, the advent of technology has made succeeding at your own company so easy that anyone can do it. You don't need to write a business plan, get an MBA, or even have any experience. Furthermore, you won't even need to work hard at it!
The problem is that the barriers to entry don't just drop for you...they drop for your competitors too. So now it's even harder to compete within a given market because of the sheer volume of competition. You may find cases at the edge (37signals' home and soapbox) where money, risk, hard work, a plan, education, experience, and connections didn't matter, but they're complete outliers. You're probably better off playing the lottery.
Starting a business is still a little risky and a little hard, but it isn't "zomg I must log 60 hours a week or it will not go anywhere" hard. Trust me. (The notion that hours translates into work is a pernicious lie that we need to eradicate.)
I am essentially a single DINK, earning two good livings for a twentysomething central Japan. The first is as a Japanese salaryman. The hours are roughly similar to what people think an entrepreneur should put in. The second is running a software business in my free time, which I do not really have that much of (see job #1). RescueTime says that I'm averaging about 5 hours a week on it.
As for competition: bah, who cares about competition. Seriously, I have never understood the whole startup "Oh my God, if there are two people in one market its like a cagefight to the death" mentality. There are billions of dollars being spent out there, today. Hundreds of millions in your city. Tens of thousands on many popular search result pages. All you have to do is go out to that vast, flowing river of cash and figure out how to nibble a sliver off a corner off a fraction. Then you work on increasing the size of your sliver, which is quite possible to do without ruining one's life.
For what it's worth, I had no business plan, MBA, or experience personally running a business.
I have HUGE respect for you and what you've accomplished; your posts on HN detailing your experiences as a micro-ISV are some of my favorites.
That said, I think you're making the same mistake that 37signals does, which is assuming that your isolated experience is representative of the population as a whole. Your business has some unique aspects that do not necessarily apply to every business type, particularly the high margins. Competition isn't necessarily the death-knell of your business, but what if your market became very crowded with companies who charged less, offered better customer service, marketed more effectively, etc. How long would you be able to survive? Now imagine that you have a bunch of salaries and overhead and everything else that a growing business usually needs. Not saying that you can't win, but it's not like the market for bingo card creation software is so big that it can support thousands of companies :)
I don't think Matt is suggesting that anyone can become successful with the tools available today.
People like John Gruber, Jason Kottke etc are the kind of people who will succeed regardless of how things are. It's just that it's a lot easier for them to do it today than it would have been years ago. Of course the barriers for entry are the same for everyone, but it's still up to the smart, dedicated person to utilise them. So I'm not so sure Matt is calling for everyone to start something. Just those who think they can make it in any environment.
Regardless of the advents in technology, the core for success doesn't change - the individual himself.
It's part of the american folk mythology (for a real obvious-in-hindsight example, consider Star Wars (original trilogy): Luke goes from farm hand to ace fighter pilot with no training, and becomes a passable jedi with a few months of training...).
It probably originates 50% from the urban/rural divide and 50% from the underlying outlook of protestantism. In brief:
- much of american history consists of pioneers going and settling the land, then -- decades later -- the 'experts' show up (these could be anything from farm scientists to law enforcement to general government busybodies). So there's this weird split between respect for learning and accomplishment (no, really!) but on the other hand the belief that you can really boostrap yourself / figure things out by yourself just fine. Anything that plays into the belief you could perform at an 'expert' level with only a very minimal amount of training is therefore good entertainment.
- the basic protestant outlook is that your (personal) salvation is predetermined (though perhaps you can mess it up), and that consequently nothing you do can earn salvation if you weren't already gifted it; however, there's a parallel belief that God will show favor upon the saved, eg by granting them success in their worldly endeavors...and so, loosely speaking, a protestant-minded person would interpret someone attaining expert-level performance in a very short period of time as a sign that that person had been gifted with salvation.
At this point in time I'd say neither of those reasons is self-consciously driving the meme's dominance, but those are some of the deep roots of that particular outlook, most likely.
the basic protestant outlook is that your (personal) salvation is predetermined
Totally OT, but I wanted to point out that predestination is most closely associated with Calvinism, which only occupies a subset of Protestantism. The Arminian school of theology is also part of Protestantism.
Yeah, but cf your copy of The Protestant Work Ethic and The Spirit of Capitalism to see this argument brought out in full; I'll also handwave and point out that in general, even when the nitty-gritty specifics of belief systems are the stuff wars are fought over, it's surprisingly common for second-order attudinal-and-behavioral consequences of a particular group's outlook to thoroughly permeate the broader society it's found in.
That's a fancy way of saying that, eg., even though the predestination thing is a mainly Calvinist outlook, the knock-on effects of that belief -- working hard but hoping for some 'answer from above' to arrive in the form of earthly success -- have pretty much permeated the deep subconscious of the American outlook.
You can see it manifest all the time, with people attributing success to innate characteristics -- eg, smarts or talent or whatnot -- and not to the work and training that developed those characteristics; this is a more-rational take on the same basic idea (earthly success == sign of grace, not earthly success == mix of lucky breaks and hard effort).
WSoP is in a different class than your other examples. Otherwise, I think that the trend to devalue classical training in professions is detrimental to maintaining high quality standards. In some things, sufficient is satisfactory. Yet, in the systems and products that we create to run our businesses and lives on, we should strive for excellence. I contend that one of the advantages that being "schooled" gives you is the ability to discern the mediocre from the great, whereas to the lay person, both seem "good." I do not think that formalized study in existing institutions is a requirement, but I do think the level of intense study that they demand is.
I found five examples to back up my case, so listen to me! As all the YC companies can tell you, for your average case building a business still takes a lot of work.
It seems like it would be a natural equilibrium for it to be a lot of work unless it's something where it's basically impossible to not work a lot. If person A works 5 hours a week, and person B does 20, even if person B only gets twice as much done as A, there's still twice as much going into the business. I guess there are outliers, where someone gets really lucky and manages to stumble on to some sort of very easily defensible barrier to entry, but that's not the norm.
The examples that 37 signals are relying on are ones where there is already the opportunity to outsource business processes - order fulfilment to Amazon etc. This is all well and good where you're doing something which is not too different from what is being done before (and at a similiar scale to what has been done before).
But what about the people trying to do something new? You're going to have to invest a lot more time for two simple reasons: a) You may not have external systems you can simply outsource to, because they may not exist, or may not fill the exact need of your business, and b) if you are doing something new, there's a whole heap more experimentation, research and trial and error involved to get a working product that has traction in the marketplace, as no-one's made the mistakes with a similiar product before which you can learn from. You gotta make those mistakes yourself.
Startups like other companies, too, have to pay for their factors of production. Labour is one of them. The labour of the founder also has to be payed --- either explicit or implicit.
Beside, i think most people that Matt points out is still quite exceptional. For one thing, John Gruber and Jason Kottke know what they are talking about more than majority of people. In fact, the act of starting itself (let alone know more than most people) is already a difficult thing to achieve. As i can testify, my friend who told me he want to be pro-blogger months ago, hasn't even started now.
So, i would probably say Matt's post is more exception rather than rule.
The problem is that the barriers to entry don't just drop for you...they drop for your competitors too. So now it's even harder to compete within a given market because of the sheer volume of competition. You may find cases at the edge (37signals' home and soapbox) where money, risk, hard work, a plan, education, experience, and connections didn't matter, but they're complete outliers. You're probably better off playing the lottery.