Featuring Startups & Thought Leadership

The Evolution of the Startup World in the Past 5 Years

The Evolution of the Startup World in the Past 5 Years




Don't Think, Just Do

During the 1990s and the first decade of the twenty-first century, start-up ventures and large corporations adopted a variety of approaches to shape what we now call sustainability-based product and strategy designs. The capacity and willingness to develop-organize and manage a business venture along with any of its risks in order to make a profit is known as Entrepreneurship.

The most obvious example of entrepreneurship is the starting of new businesses. Entrepreneurs tend to follow the "don't think, just do" model of starting a business. In the world of business, the word "startup" goes beyond a company just getting off the ground. The term startup is also associated with a business that is typically technology oriented and has high growth potential. Today I am going to give an overview of the recent evolution in start-up sectors.

The United States has achieved its highest economic performance during the last ten years by fostering and promoting entrepreneurial activity. The large firms that existed in mature industries have adapted, downsized, restructured, and reinvented themselves during the 1990s and are now thriving. Large businesses have adopted and learned and become more entrepreneurial. As large firms have become learner, their sales and profits have increased sharply. For example, General Electric cut its workforce by 40 percent, from more than 400,000 workers 20 years ago to fewer than 240,000 workers in 1996, while sales increased fourfold, from less than $20 billion to nearly $80 billion over the same period. This goal was accomplished in many cases by returning to the firm’s “core competencies” and by contracting out functions formerly done in-house to small firms.

Let’s take a look at how startup business evolved throughout US for last 5 years:

Unemployment Became Extinct

Start-up business has eradicated enormous amount of unemployment. Let’s look at a survey. In March 2011, a significant number of the self-employed, 5.5 percent or about 900,000 had been unemployed in the previous year. This figure was up from March 2006 and March 2001, when it was 3.6 and 3.1 percent, respectively.

The Creation of New Sectors

In the last two decades about 60 percent of the private sector’s net new jobs have been created by existing establishments and about 40 percent from the churn of startups minus closures. While firm births account for many new jobs, job losses from firm closures are equally important in accounting for net effects to employment levels.

Start-Up Businesses: By the Numbers

In the wake of the Great Recession, start-up businesses spiked, and then slowly trended downward. According to annual reports compiled by the Kauffman Index of Entrepreneurial Activity, .34% of American adults launched businesses in 2010, .32% in 2011, .30% in 2012 and .28% in 2013. The last figure translates into about 476,000 new businesses each month, a number consistent with pre-recession levels.

Female business start-ups, on the other hand, remained relatively stable: .23% in 2011 and .22% in 2013. With respect to ethnicity, the number of start-ups has trended downward across the board, but Latinos saw the biggest gains in recent years as their percentage of the U.S. population continues to climb.

The Prospects for 2014

Fourth-quarter GDP results were revised upward to 2.6% and according to Joseph Lake, U.S. analyst for The Economist Intelligence Unit, the economy will continue to pick up steam this year. He predicted that GDP growth will average 3% in 2014, which, if achieved, would be the fastest rate of increase since 2005. Although not impressive as compared to the 4% average growth of the 1990s, it’s a vast improvement from the where the country was just a few short years ago.

Adopting Business Plan Through Social Media

Facebook, Twitter and LinkedIn are all examples of social networks that have open the windows to make connections with other people, but let’s break down exactly what this connection looks like.

For start-up businesses, social media has required a sea shift in the way that they interact with consumers and the public. It also has brought brand reputation – a facet of business that up until recently was likely of minimal concern.

And this doesn’t mean that we look at everyone online as a potential sales opportunity either. We need to look at people as people. Just be friends, play nice, and let the sales come to you.

Finally, a conclusion may bring to light that how do you know your business model is the right one? When revenue, users, traffic, etc., start increasing in a repeatable way you predicted and make your investors happy. The irony is the first time this happens, you may not have found your company’s optimal model.  Most startups change their business model at least once if not several times. So, a last piece of the same suggestion, “Don’t think, Just do”.

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