Thursday, November 4, 2010

Post-Recession Start-Ups

It seems almost like a distant memory now to think of the events that unfolded in the summer of 2008. Following Bear Stearns, banks and financial institutions fell like dominoes as our DOW plummeted. Business as we knew it would never be the same.... and it hasn't been.

I remember when I was young, growing up on the farm, every two to three years, in the fall, my dad and I would start controlled burns of the long, dying grass in water-ways and ditches. At the end of the day, the entire area was covered in black ash, and you could hardly believe this was once a grassy plain. But the following spring, the new shoots that arose where the old grass had been burned were thicker, stronger, and greener than ever.

In the post-recession ashes of our economy, an interesting phenomenon is taking place--one that will shape our economy for the decades to come. Over 200,000 new businesses were formed in the U.S. in just the first half of 2010 alone. That's a 50% increase over 2008 and 2009. In the ashes of dead businesses, green shoots arise--stronger than ever.

And this onslaught of start-ups will not only change life for the entrepreneur or unemployed looking for opportunity. The titans of industry that survived the great recession, coming through 2008 and 2009 still competitive and operational, now face a new market that they must serve. The "whales," as salesmen used to call them, are fewer and fewer. Vendors who once survived on large kills will now need to equip themselves to fish with nets, not harpoons. Schools of start-ups will be the customer base of the future, not a few premium clients.

For the technology sector, start-ups will mean more single-seat sales, higher support load, a greater demand for self-sufficiency, and a higher number of broadband end-users plugging in. No longer will one terminal service a punch-panel that delivers broadband to 50 employees. Solopreneuers and small offices will each require discreet connections, and still expect similar performance. And, were small organizations lack in-house IT departments, much of the end-user support load will be transferred to the vendors themselves.

Cultivating, selling-to, and supporting an economy of micro-enterprise will create a new set of challenges for any business-to-business industry. How will your company adapt to this changing marketplace?

Labels: Broadband, Economy, Small Business