Sean Griffin is the CEO of BizXe and the creator of StartUp Cup. He posted this article on his company website, BizXe.com and thought it should be shared here as well. With his permission we’ve posted it below.
An Entrepreneurial Renaissance
There is no question about it. It’s an exciting time to be an entrepreneur wherever you live in the world. There is more attention being given to entrepreneurialism as a viable career path and way to innovate than at any other time in history. We are at the beginning of a full-blown entrepreneurial renaissance.
Organizations and programs that support new technology companies to launch and gain access to the tools, resources, and capital that accelerate building scalable, high growth businesses are being introduced on a daily basis.
Startup programs like Startup Weekend, Lean Startup Machine, TechStars, and YCombinator are highly successful at filtering large numbers of technology companies with mentoring and funding designed to test their business models in an effort to grow big, fast.
Let’s face it, you are hard pressed to go a full day without being fed a news story about a technology company that has raised their first and second multi-million-dollar investment or the latest IPO making the founders into millionaires and billionaires. Very exciting times indeed. At least for those that are able to turn their startup into piles of cash.
Over Promoting Unrealistic Behavior
There is a dirty little secret behind every startup story that puts a newly funded company on a pedestal, and very few people are talking about it. What is this secret?
Only 2% of all startups are funded by angels, accelerators, or venture capitalists. Let me state this in a different way so that it will fully sink in. Only 2% of all startups have a business model, experienced team, connections, and scalability, usually technology based, to raise money from investors.
Funding is for the elite. More and more the funding is going to ivy league college graduates and teams that have a proven track record of generating huge returns for investors.
This means that 98% of all entrepreneurs and startups are not gaining access to the tools, resources, and financing opportunities that will give their new company the opportunity to grow.
It’s Not Always a Technology World
It is time to think different about what it means to be an entrepreneur. The myth is that you have to be a rock star and grow a technology company to be the next Facebook or Google. This does not reflect the true reality of what it means to be an entrepreneur. Entrepreneurialism is a lifestyle, a mindset, a way to live a life with greater purpose and meaning. If we are to overcome the economic challenges we face as a nation we need to focus more energy on supporting the 98% of entrepreneurs who are starting new companies.
The challenge is that the 98% do not meet the capitalistic nature of our economy today. That is to say, that they do not have a company that can grow big fast and generate handsome returns for investors. No wonder so many have so much anger towards Wall Street.
The World Needs Small Businesses
The entrepreneurial reality of the 98% is that they are low-tech or no-tech companies, have done little or no planning, are made up of unproven teams, have little to no experience starting a company, and are not graduates of ivy league universities. In addition these companies only require a few thousand dollars to start generating revenue and will only grow 2 – 20 jobs.
Startups do not need to be a technology company. They do not need to change the world. They just need someone with an idea and the passion to take that idea into the market place. Just think about how different the American economy would be if we were giving small business startups a similar level of access to networks, coaching, and team development as the 2%.
We are over promoting unrealistic behavior. Instead of focusing on raising lots of money let’s focus on the development of viable business models that connect with customers willing to pay for the value created by the startup. By focusing on the generation of revenue that drives profitability there is less and less need to raise money.
Small business is at the cornerstone of entrepreneurship. Some will become the next Apple and most will become the next corner drugstore owning their business for 20 years. Both deserve the same support and regard for making a difference in our lives.
BizXe is born out of this frustration to see entrepreneurs armed with any type of idea gain access to the coaching, resources, and tools that the 2% have access to.
It’s time to start celebrating the real heroes of our economy, the 98% who work to make our lives better each and everyday.