Thursday, July 11, 2024

Startups are Booming!

One of the many interesting side effects to the COVID-19 pandemic has been a reported boom in American startups.

On one hand, it makes sense. The world was faced with an almost unimaginable crisis that forced entire facets of society to pivot to new ways of operating. From zoom calls to facemasks, new needs required ingenuity and presented opportunities for entrepreneurs to answer the world’s problems. Many businesses repurposed themselves, adapting to the services they could and could not provide. And, of course, as social safety nets caught large droves of workers forced out, at least temporarily, from the workforce, it provided many people the space to reexamine their relationship with work, their families and the way they spend their time.

But now four years past the infamous early days of 2020, the trend toward entrepreneurship has seemed to stick. According to a recent article in the Economist, in 2023, applications to form businesses reached 5.5 million, a record. While the early startups of the pandemic focused on the shift to remote work, business applications are now focused on artificial intelligence. What are we to make of this trend?

Clearly, new industries have provided economic opportunities that helped catalyze entrepreneurs, but it is quite possible a lack of opportunity has also driven the resurgence. As the Harvard Business Review noted, the median net worth of American households plunged during the recession between 2007-2010. Whether it’s a feeling of malaise with stagnating wages or newfound confidence since the pandemic, workers are more eager than ever to take their professional destinies into their own hands.

Another explanation could be that the cultivation efforts of business communities, universities, and local governments to provide incubator hubs for entrepreneurs to connect and share ideas are starting to bear fruit. As frequent readers of entreVIEW already know, every year, attorneys at Lathrop GPM participate and judge the Minnesota Cup, a community-led, public-private partnership that brings together corporations, investors, foundations, government and skilled volunteers to support Minnesota's entrepreneurs through the country’s largest business plan competition. Just last week, along with another colleague (and fellow entreVIEW author) I volunteered to participate in a program at Macalester College to provide feedback to students whose task was to start a purpose-driven business. I was amazed at both the energy and enthusiasm of the students, but also their level of sophistication. We see firsthand the importance of providing platforms and spaces for entrepreneurship to flourish. It makes a difference.

Whatever the reasons, starting a business has always been part and parcel with the modern American Dream. What business would you start today?

No comments :

Post a Comment