Are You Prepared for the End of the Startup Era?

Date posted: February 7, 2018

startups

Over the past few years, startups have enjoyed a technological renaissance of sorts – one that may be at an end. Are you ready for it?

By Matthew Davis

We’ve been living in a time of rapid technological change. Many of us who are alive today still remember an era where phones were shackled to the wall, where the concept of global connectivity and digitized infrastructure were little more than pipe dreams. It’s almost dizzying to think about how much the world has evolved – and enterprise with it.

Trends like cloud computing and mobility completely changed the playing field. Suddenly, startups which may have struggled to compete with titans of their industry had access to the same powerful tools and infrastructure as their larger peers. Through the cloud, small businesses could operate entire networks without requiring a single piece of hardware.

“The cloud is the great equalizer for today’s startups,” wrote Entrepreneur’s Bask Iyer in a 2015 article. “It is one of the few areas where a startup can access the same resources as large corporations…For any startup, cloud makes resources that were once limited to major enterprises not only accessible, but also affordable.”

Thanks to the cloud – and the tech that grew out of it – small businesses enjoyed a renaissance of sorts. Here’s the bad news. That renaissance may well be at its end.

It isn’t that the cloud has become any less relevant, or mobile any less essential. Rather, there’s a bunch of new technology on the horizon. Technology which, by its very nature, favors businesses with massive operating budgets.

“We live in a new world now, and it favors the big, not the small,” writes Wired columnist Jon Evans. “The pendulum has already begun to swing back. Big businesses and executives, rather than startups and entrepreneurs, will own the next decade; today’s graduates are much more likely to work for Mark Zuckerberg than follow in his footsteps.”

There isn’t any one factor that contributed to this change, says Evans. Rather, it’s a combination of problems. Chief among these is the fact that the next “big markets” for enterprise (artificial intelligence, AR/VR, self-driving cars, and drone technology) are all restrictively difficult to break into.

Startups simply don’t have the resources to make waves in these fields. To make matters, worse, many businesses like Google, Amazon, and Facebook – all of which have dipped their toes into these industries in one way or another – have established nigh-unimpeachable dominance over the web. No one can compete with them, and the regulations around monopolies are too outdated to address the problem.

As for what startups and small businesses can do about this new paradigm? Not much, according to Evans. Just wait, hope, and pray that they can somehow survive to be acquired by a larger firm.

Pretty bleak, right?

I’m not sure things are as bad as Evans is painting them to be. Certainly, I’ll acknowledge that modern mega-corporations have far too much power – both economic and political. But at the same time, I think it’s important to note that governments such as the European Union are cracking down on that power.

Consider GDPR, which establishes a set of heretofore unprecedented protections for customer data. Or the fact that the region already has some of the strictest, most consumer-friendly privacy laws in the world. While it isn’t likely that other nations will follow suit anytime soon, I expect that innovation will still be alive and well in such regions.

Things are going to get tougher for startups, especially those trying to break into the bleeding edge of tech. Of that, I have no doubt. But I also believe that we’ll still see plenty of rising stars breaking into tech – and that if you endeavor to understand the new landscape, yours can be among them.

Matthew Davis — Matthew works as an inbound marketer and blogger for Future Hosting, a leading provider of VPS hosting. Follow Future Hosting on Twitter at @fhsales, Like them on Facebook and check out their tech/hosting blog, http://www.futurehosting.com/blog.

 

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