Entrepreneurship Within the Modern Era

Entrepreneurship within the modern era poses substantial difficulties and challenges. Most specifically the growth of the internet and the evolution of communication technology have made the barriers to market entry almost transparent, while simultaneously decreasing the probability of success by a large degree. The new age entrepreneur must deal with increased customer knowledge, the immediate erosion of competitive advantage and many other factors that will dramatically influence both the formation, execution and continual growth of any business venture.

Several changes have occurred to redefine the arena of entrepreneurial competency. While before the internet era and the modern telecommunication boom, entrepreneurship required significant start-up capital. This start up capital was not only devoted to the area of company creation, product branding, marketing or operations, but rather in the ideation and research process. There were no convenient portals for information analysis and due diligence. Therefore the beginning of an entrepreneurship venture required the upfront costs associated with understanding market share, target market, and other areas related to due diligence. With the internet revolution came a flood-gate of entrepreneurship resources that are devoted to executing upon entrepreneurial competencies. The easy and cost efficient access to information and due diligence has significantly impacted entrepreneurship in general, and starts up costs specifically. Telecommunication transformations are another factor that has changed the face of entrepreneurship. The development of completely mobile platforms for communication implies that central aggregation of mindshare is not needed to start businesses. Rather, organic growth with operators spread hundreds or even thousands of miles apart are not only feasible but optimal for start-up ventures.

Despite the benefits of technology however, it has also led to significant weaknesses that affects entrepreneurial competency. Specifically, the convenience of execution tools has turned the emphasis to "act now, plan later" rather than the traditionally minded business plan approach. This has led to more and more businesses becoming ultimately destructive and efficient.

The purpose of this particular research analysis is to understand the implications of technology changes to entrepreneurial competency and the necessary steps towards successful start-up creation.

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The landscape for entrepreneurship has continued to change at a significant pace over the past decade. This is primarily due to the decreasing cost of market entry and the pace of product assimilation. Five of the top twenty five highest rated companies by Fortune Magazine in the past year were less than ten years old, as compared to only one in 1980. The implicit difference between today's entrepreneurial environment and that of the past is that the pace of change is dramatically faster. Technology is the chief contributor the growth of this particular trend. The development of the internet has created a new medium for communication between consumers and businesses; it also has become an entirely new and sustainable method for commerce. In effect it has built a world within a world, and this virtual business platform has allowed new businesses to become instantly successful. As current companies make the shift from physical store fronts to virtual store fronts, the transition has left both new product and service opportunities for a new class of entrepreneurs.

A recent Forbes 2006 survey shows that almost 40% of new business start-ups are centered on the internet and related services sector. The growth of the internet has meant new opportunities for business startups in general but it also have changed the methods by which entrepreneurial competency occur. Before the advent of the internet era, significant startup capital had to be allocated for product conception. There was no easy method by which entrepreneurs could perform due diligence and collect information about their market, competitors or consumers.

Systematic search has become a haven for cost reduction for entrepreneurs. Systematic search can be loosely defined as the ability to search through collected and organized information effectively and efficiently. The most common examples of systematic search capabilities is the use of search engines such as Google or Yahoo, which are both excellent systematic search utilities. From an entrepreneurial perspective, the emergence of digitalized information that can be accessed through extremely well designed information systems has decreased the time and cost of creating a new startup. The benefit of systematic search can be seen in a myriad of entrepreneurial competencies.

First, systematic search increases the entrepreneur's ability to develop new business ideas. The greater flow of information through the internet and the ability to search and access this information makes analysis of business decisions to be significantly easier. Entrepreneurs can rely on systematic searches to be robust enough to provide them with instant depth of information that would have taken then weeks if not months to collect. This extends to systematic search engines that are specifically designed for entrepreneurial interests. LexisNexis for instance, is a search engine optimized for the searching of patents as well as legal briefings. Other online search tools have enhanced the ability of entrepreneurs to gather and assess information. According to Forrester research, 80% of entrepreneurs utilize established search engine technology as the foundation of their due diligence assessment process.

Systematic search engines are also at the heart of the new revolution in due diligence. Perhaps one of the most costly areas of early startups is the due diligence process, which requires significant time and resources to collect information on market share, competitor information, consumer base assessment and a myriad of other statistics and analysis needed to make accurate assessment for business models. The growth of the internet has dramatically changed the context of due diligence. New online information systems that utilize very robust systematic search features allows due diligence and general information access to be much faster and convenient than previous generations. Hoovers, ANTPec, and other information portals have made it significantly easier for entrepreneurs to access a variety of media sources.

Another major benefit of the changing social medium is that it has transformed the viability of communication between different entrepreneurial interests. Entrepreneurship is no longer a "solo venture" that requires years to aggregate information, find partnerships, establish investor relationships and launch a finalized product, the evolution of the internet has changed all of these trends into a cohesive and efficient engine. The emergence of social networking systems has made it easier to connect to individuals and create mindshare around a variety of projects using an almost unlimited amount of resources. According to Forrester, venture capitalists now receive up to 50% of their leads from online social networking mediums; this figure has risen from 10% in 1990. The growth of social networking through the internet sphere is a direct result of complicated systematic search utilities. The ability to search not only for documents and information, but also through personal relationships has created the next generation of entrepreneurial competencies.

This is not to say however, that all of the changes within the entrepreneurship world are positive. In fact, the changes that are occurring within these industries could be double edged swords. There are now three times as many startup ventures on a yearly basis than in 1995, the majority of these new ventures are built atop technology and internet infrastructures. The challenging nature of e-commerce and e-business is that there are fewer barriers to entry because internet technology has dramatically decreased the cost of entrepreneurship. While traditionally, large companies with resources advantages gained a significant barrier to entry once they established critical mass; today this is no longer true. From an operational perspective, small niche market companies may be much easier to defend than larger entities. The pressure to always innovate because the cost of new startups is so low could ultimately hurt many current market leaders.

Decreased entrepreneurial costs is no where more evident than with the changes within telecommunications. One of the biggest barriers to entrepreneurial competency is developing an organization that can operate both without large expenditures but still maintain efficiency. Before the advent of the internet and new communication mediums, established companies had the advantage of having large human resource budgets and operations budgets to create a strong organizational framework with bilateral communication. Today, telecommunication changes allow startup companies to operate as efficiently if not more so than established players within the market. Communication platforms in two specific areas have contributed to the emergence of greater entrepreneurial competency, direct communication and data transfer.

Mobile technology has dramatically changed the scope of corporate organization and entrepreneurship. It is no longer necessary for all players on a business project to be sitting in the same room, or sitting for that matter. Growth within mobile technology now implies that everyone can be kept in constant contact no matter their present physical location or circumstance. For startups, this has been an infinitely beneficial boon; it has allowed them to eliminate the need for a large office space and for relocation. Startups can feature teams of individuals who are parsed all over the country or even the world, working via directly connected mobile technology. In many ways, this has made startups much more efficient and adaptable than larger companies because there is no viable change of command. In general, it has seen significant changes to the infrastructure of entrepreneurship because there is now no longer a need for strong physical organizational structures or spaces. Albert Lin, of the American Technology Research Institute explains that in 2007, over 300,000 entrepreneurs will use Skype as the primary means of business communication. The freedom of mobility therefore, is one of the biggest advantages for entrepreneurial competency within the past decade.

The second area of communication change has been the increased speed, efficiency and cost effectiveness of data transfer. The telecommunication industry has spent as much as 580 billion dollars within the past decade in connecting the world via fiber optic technology. As a result, the entire world is now digitized and can send and receive information at a much faster pace than in past generations. The implication for entrepreneurs is the greater freedom provided through data transfers, this new medium allows for instant decision making and team working across geographic locations. The telecommunication revolution within data sharing is part of the reason that outsourcing and off shoring has become such powerful and appealing options for the majority of American companies.

Another major area of entrepreneurial competency that has been affected by the growth of technology has been consumer reach. Traditionally, one of the primary advantages of established businesses, and the largest cost to businesses in general has been marketing and building brand equity. The internet however has transformed marketing and allowed smaller players and new companies to build brand equity through the utilization of systematic searches as well as new communication mediums. Systematic searches allows users to target specific niche audiences, this is best demonstrated by Google Ad sense technology which allows individuals to select the specific key words for which they bid on in their website. Using a robust systematic search engine allows entrepreneurs to target niche audiences and greatly reduce their marketing costs. They no longer have to rely on broad market tools such as television ads or newspaper ads, the specialization and focus provided through online web portals have reduced their marketing cost dramatically.

The combination of technology innovation within systematic searching and the access of information, as well as growth within telecommunication have truly redefined entrepreneurship. From a cost saving perspective, it reduced the cost of due diligence, marketing understanding and communication to consumers. It also reduced the needs of a corporate entity in terms of organizational space and physical store fronts. From a convenience perspective, it has provided entrepreneurs the complete freedom to pursue their ventures through digital mediums without having to relocate or sacrifice their current positions. The result is that entrepreneurship has never been easier than it has been in today's world and will continue to grow at a substantial pace. The evident problem is that there are now lower barriers to entry for businesses that are already established and even startups that are currently on the market. This encourages companies to continue to innovate to maintain their current market-share and to expand their business at a rapid pace.