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What's changed in entrepreneurship?
Entrepreneurship as we know it today was pretty well defined by a Harvard Business School professor, Howard Stevenson: “the pursuit of opportunity without regard to resources currently controlled”. It’s about not needing anything, whether that’s money or other people’s approval, to decide to build your own solution to a problem. The internet made that true in ways that it never was before.
If you want a really quick history of capitalism, here it is: Back in the 17th century when there were boats sailing around and trading across the whole globe, it cost a lot of money to build a ship and stock it with the goods you wanted to trade.
It cost so much money that some people had the good idea of selling off parts of the boat and the goods, so people who were rich (even if not rich enough to own an entire boat) could invest in the voyage and share in the profits. But there was no work involved - it was just a question of having money, putting it at risk, and hoping to get more back. Needing to already have money meant the benefits of the system weren’t open to many people.
Then at the end of the 19th century, things got interesting. People began building businesses that needed much less capital to get started. It still took a lot, but nowhere near as much as two centuries earlier.
That meant people could start to have two phases in their lives: one where they worked and saved, and then the next where they could invest in their own business using those savings. The risk was huge, but an individual could decide to take that risk all on their own. And lots of people are still holding onto this vision of entrepreneurship.
But in the past few decades, a new generation arrived and figured out how to be entrepreneurs without having any capital. How did it happen?
The internet came along, and its growth changed the world. Specifically, three things have changed in the past 20 years:
Everything that used to be a fixed cost became a variable cost. Before you needed to buy things to start your business, now you can rent them. Even back in the ‘90s, if you wanted to start a business on the internet, you needed to buy a server. Today you just hook up to AWS, or Azure, or Digital Ocean, or whatever.
Everything that you need to know became accessible in just a few clicks. To get an answer to a question, you don’t have to call an expert or ask an institution to let you in; you can just find the information yourself. You don’t need permission to learn anything, you just need the motivation, time, and the courage to actually try.
Capital became extremely abundant. For most of history there wasn’t much capital in the world and it had a hard time moving from place to place. Today, there’s a ton of money and it flows much more smoothly (not totally smoothly, but still).
Those three things combine to make it so that now there’s really no other choice for people than to be entrepreneurial. That doesn’t mean they’ll all be entrepreneurs, but just that the entrepreneurial spirit is coming for everyone. Just like professional athletes aren’t the only ones who play sports, just like authors aren’t the only ones who can read and write, the skills of entrepreneurship are going to keep diffusing until pretty much everybody does it, to various degrees, at various levels of skill.
Time to take more, bigger risks!