It’s a Good Time to Start a Company

There’s some heat in the internet market again, and it seems a new company pops up every day – my RSS feed to ehub just
popped up with 6 new entries, and that’s just for one day.

Inevitably, the heat fuels companies that are being formed on a questionable basis, commonly with hype-guided products that are really just solutions looking for a problem. It’s those well-meaning, but ultimately doomed ventures that breed the emerging sense of senselessness in a particular market, in this case web 2.0.

And then come the generalisations; people arguing there is too much hype, too much cash – sometimes even too little cash – too much competition, too few technical staff, too few users, too many parties to attend… it goes on.

Generalisations are the warning signs on a road to narrow-mindedness. These are all interesting aspects to a current market, but ultimately they are just part of the everyday challenges or opportunities of running a business. Deal with it. Don't ever make the mistake of considering this type of thing as a justification for starting (or ending) a business.

Just to help the point along a little, I’ll fire a salvo for the other side, not that anybody should be taking sides. Here’s my list of top reasons you should definitely start a web 2.0 company now. Please read them, take the point, which is that anybody can come up with generalisations to convince you of anything, burn the list, then get back to creating some value for people:

  1. Infrastructure is cheap – bandwidth, hardware, rack space. Infrastructure is no longer any form of barrier to starting something.
  2. Tools are mature — the software systems that form the basis upon which many services are built are now far more mature than they used to be. Linux, LAMP, Java/J2EE, Ruby, QT. This results in you delivering value sooner and with less risk.
  3. People want to know you — web 2.0, and the internet generally being back in vogue, makes it easier to get press and general awareness. Consider it a temporary bonus though. Obscurity is only a bubble away.
  4. Capital is easier to obtain — You’ll spend less time educating VC’s and angels, and you’ll find they are more receptive to a hot market because of the additional opportunities that arise from competitors, partners and suppliers (ultimately wanting to buy, copy or use you).
  5. Technical staff are easier to find — Engineers are starting to believe in the market again.
  6. Competition is fierce — Always a good thing. You’ll find out faster if you actually have something worthwhile and either succeed or learn your lesson faster. Competitors breed value.
  7. You get random out-of-blue “reading this far” awards — Nice of you to still be here.
  8. You get to ignore the heretics — Incumbents like to subconsciously justify their positions. Such as those who have achieved a healthy exits claiming the time has passed to have a go. Don't believe the humbugs.

Not surprisingly, tonight's 2Web verbal flood drowned in the debate.

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