If you are an entrepreneur, chances are that it feels like the startup space is packed nowadays, right? It’s true. In fact, the space not only “feels” more crowded, it literally is.
Don’t just take our word for it. According to the National Venture Capital Association, 2017 has seen the largest amount of venture capital invested in the last decade. Total investment in new deals is beginning to mirror pre-dot-com levels.
So, what does this mean for you? Does it mean that you should hang up your boots and forget your dreams of building a successful company because the best times have already passed?
No — not at all, and we’ll explain why.
Not only are we entrepreneurs who built and successfully sold VEEV, the world’s first açai-infused vodka, but we have also invested in dozens of successful companies over the years — including names like Slack, Blue Bottle Coffee, and Pressed Juicery, just to say a few.
Here’s a lesson that we have learned during our time building our own and others’ companies: there never is an ideal time to start your own business.
The process is always daunting, regardless of economic conditions, the number of startups already existing, or the levels of venture funding. Because of this, we usually recommend that you start your business now and get to work.
With that said, we’ll share these two trends that are making life in the startup world more difficult, and we will provide some insight to overcome these issues:
- Everybody is an entrepreneur today
- Everybody is an investor today
First, seemingly everybody is an investor today as capital is as abundant as ever. As a founder, resist the temptation to take extra funding for the sake of receiving extra funding.
We’ve already discussed how much money is being poured into startups (whether it be through VCs, Indiegogo, AngelList, or another platform), so shouldn’t you try to get in on the fun, too? Shouldn’t you take advantage of the extra money to put it back into your business?
No. We strongly believe that founders should only seek the minimum amount of funding necessary to reach their goals and avoid any excess.
And in a world where exits may be beginning to slow, more money weighs down your company and makes you less likely to achieve an exit. Resist the temptation to take too much money and stay lean.
Similarly, seemingly everybody is an entrepreneur today.
By now, it’s obvious that the startup space is crowded and extremely difficult. Platforms like Amazon Launchpad and Y Combinator are encouraging entrepreneurs to pursue their ideas everyday. This is great news — as we can probably all agree that innovation is a good thing.
However, this means that the path is going to be tougher for you as you face increased competition. Since there are so many entrepreneurs, it is increasingly difficult to differentiate between the ones with great ideas and the ones who have not-so-great ideas.
Therefore, entrepreneurs will have to spend more for on marketing and branding to set themselves ahead of the pack. Another way to set yourself apart of the herd is by following our earlier advice and resisting taking on extra funding. Chances are that it won’t help you beat your competition.
In the end, the startup environment is crowded and of course, challenging, but any successful entrepreneur will realize that this is a part of the life of a founder.
Now go beat the odds and build your company!