Don’t worry, this is not a post against entrepreneurship! It’s actually about new opportunities I see.
Myself and others have written previously about a thesis on how technology is enabling a new wave of entrepreneurship and innovation. Hunter Walk has started a fund for it. However, there are still many challenges that people face if they want to become self-employed, which presents opportunity for entrepreneurs and investors. Below are some of those challenges. I think solving for these could make for some valuable companies.
Sales. Starting and growing a business requires getting access to customers and selling them a product or service. Many people HATE selling, and it can be really hard and time consuming. Companies that provide distribution or access to customers, such as marketplaces, could help solve for this.
Skill sets. Managing a business requires skill sets and knowledge in many different areas including human resources issues, financial management, marketing, etc. Companies that help people hire and recruit the skill sets they don’t have, such as oDesk, could be valuable here, as well as anything that could help simplify or automate managerial tasks, such as what Quickbooks did for accounting.
Fear. Starting a business is risky and scary. If you’re on your own and there is failure, there is no one else to take the blame except yourself. This one is probably hard to solve with technology hah. But part of the fear is financially driven. The area that’s of particular interest to me is the student loan debt problem. People can’t afford to take the risk of uncertain income if they have to make payments on their student loan. There’s over a trillion dollars in student loan debt and a lot of people are affected by it, so I think any business that can help people with their student loans could be valuable.
Capital. Many, but not all, businesses require startup or growth capital. I think there could be opportunity for a fund that serves businesses that don’t aim to be worth a billion dollars but could still be worth 25 or 50 million, and or throw off substantial cash flow. Definitely seems underserved – there wouldn’t be much competition like there is in big VC. Companies like Funding Circle are also really interesting here.
Technology. Technology and product development will of course be a part of any tech enabled business. As discussed there have already been many advances here, but I think there’s still plenty of opportunity for improvement. I imagine there’s a market for just about anything that could reduce the cost, time, or learning curve of building technology.
I suspect these are some of the reasons why people don’t become self-employed, and the challenges they face if they do. If you believe this will be a growing market opportunity, then I think solving for the pain points associated with it, could create a ton of value. Do you know any startups in this space? Please let me know in the comments.