I recently read “The Illusions of Entrepreneurship” by Scott A. Shane.The book does a lot of “myth busting” with regard to many of the misconceptions people have about entrepreneurship.It’s a relatively short and interesting read.
In the early nineties I did a short stint at a Small Business Development Center, so I’m aware of many of the inaccurate perceptions and misconceptions surrounding entrepreneurship.However, a few things did surprise me:
Entrepreneurship in the U.S.has been declining over the past couple of decades.I never would’ve guessed.
“Between 1982 and 2002, startups in the software industry were 608 times more likely than start-ups in the restaurant industry to become one of the 500 fastest growing private companies in the United States…”The fact that software startups have a higher success rate than restaurants is not a surprise, but the magnitude of the difference is astonishing.
“On average, businesses founded by people between the ages of 45 and 54 tend to perform better than those founded by people less than 35 years old.”I could see where that would be true on average, but I doubt it holds true for web/software startups.
The one thing to note is that the book looks at small business in aggregate.Thus, the statistics aggregate mom-and-pop businesses as well as more sophisticated startups.The author does provide some suggestions for entrepreneurs, but because of the nature of the book, the suggestions are broad and generalized.
Scott Shane also wrote “Finding Fertile Ground” which is specific to tech startups.I read Furtile Ground a couple of years ago and thought it provided a lot of good information, but the cost-benefit of some of the suggested market and strategic analyses may not be useful for web startups (i.e. it may be cheaper to build the product and test customer response than it would be to do a comprehensive market analysis).
There’s a Business Week interview with Scott Shane here.
Heather and I submitted a TechStars application last year, and although we didn’t make the cut, we learned a lot, had a bunch of fun, and gained a mentor in the process. We’ve submitted a TechStars application this year as well, and we’re currently working on a prototype.
Free RSS Readers Not long ago, NewsGator announced that all of its client RSS readers would be free. Someone asked me why they’d do that. My response was that NewsGator’s management probably decided that free RSS readers would help drive demand for their more profitable enterprise services. But, Joel Spolsky, in his Strategy Letter V, explains the complementary product thing much better than I can:
Demand for a product increases when the prices of its complements decrease.
The Chicken or the Egg? I think it’s kind of interesting that years ago a small software company actually used the proliferation of its complementary product as the vision for the company, “a computer on every desk and in every home.” Regardless of what you think of Microsoft, in the early days of the company, I think they did a great job of communicating their “change the world” vision by emphasizing their complementary product.
I suspect that most new technologies face the same chicken and egg problem that micro software faced 30 years ago. I’ve been working with semantic markup (microformats and RDFa) lately and I see the same sort of problem with the semantic web stuff. In order for semantic markup to be useful, there has to be content made available as semantic markup. In addition, users (or computers) need something that can “read” and possibly interpret semantic markup. I’m seeing signs of life in both areas; Technorati and Yahoo seem to be leaders with semantic content and there are several Firefox add-ons for micoformats. Also, according to rumors, IE8 will be able to recognize microformats.
Not Implicit Enough Currently, most semantic markup is “read” by a browser plugin, and once the markup is identified, it’s up to the user to do something about it (i.e. add an hCard to your list of contacts). But I don’t think content and reader are enough for the semantic stuff to work well. And, I think that’s one of the problems with the current state of the semantic web, it’s not implicit enough; users have to take some action. Semantic markup is certainly better than nothing, but there’s still a wide, gaping void between providing content that a computer can recognize and process (i.e. semantic markup) and improving the user experience by implicitly using and consuming semantic markup.
I think the killer complementary product or service for semantic markup will be a tool (add-in, application, web service, whatever) that not only recognizes semantic markup, but also interprets and processes the information on the users’ behalf. I don’t think that capability requires artificial intelligence; I think it can be something as simple as tracking attention and user preferences much like RSS readers do today. Twine is probably a good start.