We are in the early stages of a new era and type of entrepreneurship.
The Covid situation has opened up a whole new set of needs in terms of managing remote workforces, sanitation, telehealth, and other areas many of which will not fully go away.
In addition to these new needs, there is now going to be a large supply of entrepreneurial tinkerers. As a large portion of startup employees are now working from home (or are laid off) and as a large number of recent graduates find they cannot get new jobs, we now have a large population with the opportunity and time to start new ventures.
Pre-covid, employees working in an office would find it hard to run a side business as it would have been frowned upon by peers who saw you doing it, and there are legal ramifications such as who owns the idea if you started it at your employer’s site? Now that those people are working from home with an additional 90 minutes from no commutes, expect more people to start and manage side hustles – some of which will turn to big businesses.
Meanwhile, recent graduates – and current students- who struggle with getting employment are now going to find themselves tinkering with new ideas to generate cash on the side.
Some of these new businesses will be VC backable, but due to barriers to discovering this new talent, the fact that everyone is remote (so it is hard to build a typical “startup office”) and entrepreneur’s need to immediately pay the bills, a lot more are going to be smaller bootstrapped ventures.
The pre-covid model was 1) leave your job, 2) work full time on a new billion-dollar idea, 3) get angel/seed funding, 4) find some expensive cool office space.
Today’s model may be to 1) Start working on a side project on the “commute” hours from your new work-from-home environment, 2) Focus on smaller but profitable ventures that can bring in cash now, 3) build it out remotely.
This means building smaller, much faster companies. Many will be started with small amounts of cash using tools like no-code to get prototypes going. It will also mean more remote-first companies with remote support staff (remote lawyers, accountants, design contractors).
The old Angel->VC->Huge exit pathway is not going to go away. And obviously, some spaces (like remote work, biopharma) are going to be hot. But overall, I think we will see a plethora of smaller, cash-flow style businesses with a few that later become huge – similar to say 1996 or 2004.
- Finance for smaller, bootstrappable cash-flow businesses (I believe Runway.com is doing this).
- Development tools or companies that can convert no-code to full-code. At some point, people will exhaust their no-code tools
- Support teams for new startup ventures
- SaaS service tools for managing smaller businesses (look at Runway.com for accounting, but there will be others for outsourcing small business support, marketing,etc…).
If you currently are working on one of these opportunities or want to work on them, please contact me at charlie at iamcharliegraham dot com