The democratization of entrepreneurship

A new generation of tech entrepreneurs from around the world have opportunities not available to previous generations. The democratization of entrepreneurship is a new phenomenon that will change the global tech landscape. 

There have been two primary limiting factors to previous generations of tech entrepreneurs that did not live in Silicon Valley: access to capital and access to networks.

The first limiting factor, access to capital, becomes less of an issue due to two underlying drivers: (i) building a startup requires a fraction of capital compared to only a few short years ago, and, (ii) capital is becoming more and more available around the world. In regards to startup costs, less than a decade ago most technology startups were required to buy servers from Sun Microsystems, database software from Oracle, server and rackspace from a large colocation facility, and pay ungodly sums for bandwidth capacity and storage space. The capital requirements fast added up to several million dollars. Today, thanks to available open-source software and affordable pay-as-you-go cloud services, the capex required has been reduced down to a mere thousands of dollars of opex instead. The concept of creating a minimal viable product with less than $1,000 would have been unthinkable just a decade ago.

Moreover, not only has the underlying cost to start a business dropped dramatically, but the access to venture investors who are willing to take the risks of investing in startups have started to proliferate all over the world.  VC investing is no longer limited to Silicon Valley and a few other smaller tech hubs in the world. It is now a globabl phenomenon. While there is still more capital available in Silicon Valley for venture financing than the rest of the world combined, other regions are catching up. If you are a great entrepreneur with an outstanding business idea, investors will compete to finance the business regardless whether you live in Bangalore, Brussels or Bangkok.

Beyond sufficient capital, the second factor limiting entrepreneurship on a global level was a lack of access to networks. We often forget, that the internet is barely two decades old. Today 3 billion people have access to internet, which is 20 times larger than it was just 15 years ago. In only one generation, the global playing field has been leveled. Access to networks, both in terms of information networks and also distribution networks are changing fast. Startups such as Coursera give people access to tools to learn the skills required to build a tech company. New technologies are empowering people from everywhere around the world to access information on their smartphones. Francis Bacon already formulated 60 years ago in his Meditationes Sacrae that "knowledge is power". Now knowledge is spreading around the globe at a rapid pace. And while the access to information accelerates, the access to networks is also becoming unparalleled. Facebook offers a distribution platform that reaches more than one billion people. Developers from anywhere in the world can upload and distribute their products to app stores that give them instant global distribution. A gaming studio in Bali can have its game published on Tencent's WeChat platform or Rovio's publishing platform and have access to hundreds of millions of users immediately.

The world is becoming smaller

The world is becoming smaller

So what are the odds that the next Apple, Google, Facebook, or Twitter will be born in Israel, Italy, India or Indonesia? No doubt, Silicon Valley is still a unique place. John Doerr said that "Silicon Valley is not a place, but a state of mind". It's exciting to see that this state of mind of entrepreneurial ambition is spreading around the world. Will the next Mark Zuckerberg come from Sydney, Stockholm or Singapore? We will see. The odds that this will happen elsewhere though are increasing tremendously due to the democratization of entrepreneurship.

Image Credit: Stuart Richards / CC