the evolution of entrepreneurship

When I think about entrepreneurship, I think back to an unforgettable day of my childhood. I was 11 at the time, visiting my grandfather at his workplace. You see, I’ve have always been fascinated about what he did exactly, whereas other children would visit their granddad’s in their plush offices with their professional jobs, my grandfather had mostly spent his time in these massive warehouses, where he had all these gigantic machineries and odd mechanical contraptions, that it was so mysterious about what he did exactly or who he was exactly. And I had so many theories. So that day, as a young boy brimming with a curiosity that was no longer controllable, I finally worked up the courage to approach and finally ask him: “Grandpa, are you a robot?” To my surprise, he told me, to my utmost curiosity, he told me that he was an entrepreneur, an equally science-fiction-esque term that he graciously explained to with his story. He was in his late 30s at the time, a Japanese who decided to move to Taiwan to start a business because of the war. When he arrived, he worked odd jobs for 5 years just to save enough money to start his business. And being an immigrant who knew nobody, he spent 3 years building contacts, literally by waiting tables at various restaurants at night besides his day job.

After the business was launched, he spent another 2 years to accumulate his first 50 customers by going door to door. He was so proud of these challenges that he had overcame that he emphasized that great difficulties define the journey of business. And an entrepreneur was the person bold enough to undertake such journeys in order to achieve greatness. He said that I should remember his journey well as one day I might very well go through the same if I undertook this path. 

Although not robotic, my grandfather was certainly prophetic, I did end up becoming an entrepreneur but my, my, the journey I experienced was very different. If I were to take his story as a benchmark then I can firmly say that the process of entrepreneurship today certainly has evolved significantly, it is simply incredible. The driving force of this metamorphosis is technology. In today’s society, we are immersed with unimaginable technological advancements; culminating most notably in birth of the digital age and if you think that the age of the internet is only changing your lives, think again because it’s also rapidly evolving the very nature of entrepreneurship itself. So much so that I often wonder how my grandfather would feel if he were to start his business today. What would be different? 

Well to start with, take a moment to consider how the barriers of launching a business are now being effectively dismantled by technology. Startups traditionally had to overcome immense challenges even to start. For example, a hardware startup had to build prototypes and even start factories to manufacture the goods. A tech startups would have to buy computers and license softwares. A retail startup required a physical store to sell. Yet, today in stark contrast because of technology, startups do not have to build their own factories, as the costs are easily absorbed by offshore manufacturing. They can now manufacture from countries as far as China just through a few Skype calls. Open source software and cloud computing allows startups to engage within the tech space without their own development team or servers. Startups no longer require a physical showroom, as you can very easily set up an online store in a matter of minutes, reach and sell to your customers instantaneously. For business logistics, startups do not need an office, they can work remotely with teams halfway across the city or even the world and no longer required is an insane marketing budget with social media and platforms what would have taken my grandfather years, takes only a day or maybe even less. So, technology has actually reduced many of the traditional challenges that used to define business. 

The immediate impact of this, the cost of getting the first product to market has dropped by a factor of more than 100 in the last decade. Entrepreneurs can now start a business for thousands rather than millions, and consequently, the playing field has been substantially levelled, whereas in the past, capital was the major barrier of entrepreneurship, only those who had it could effectively participate in industries because it meant effective access to resources, and marketplace involvement; today, that is no longer the case. And we can only imagine what that means from an economic perspective.

Another important outcome is that the diminished cost of entrepreneurship through technology has also substantially reduced the huge risk factor of starting a business. In the past, being an entrepreneur was akin to climbing Mt. Everest, you only had a single life threatening opportunity as it previously took a hefty sum of resources and immense hurdles to test your hypothesis, today, we can now easily validate and discard ideas rapidly, sometimes even overnight as I’ve seen it happen before. 

Thus in the 21st century, evolved entrepreneurship has lost its exclusivity as well as its fatality, evolved entrepreneurship realizes the economic theories of free market access and encourages competitive forces at a scale we have never seen before. That we live in exciting times.

In a similar capacity, external entrepreneurial funding has also evolved in this digital age. Stemming from before, The plummeting cost of starting a business has definitely collapsed the investment size required of financiers; allowing investors to realistically engage in business investments without too drastically affecting their risk management. But more importantly, technology has also transformed how entrepreneurs access funding altogether. In the not so distant past, if an entrepreneur wanted to raise funds,they have to approach esablished financial firms in established financial districts located in big cities such as Hong Kong, New York or London. It was a very inefficient way to raise capital if you think about it because the success of doing this was usually limited to the geographical accessibility as well as the personal network of the entrepreneurs. 

Today, technology has created unparalleled accessibility for venture capital. Entrepreneurs can now very easily source capital from all over the world even if they are geo locked. You could immediately access investors in other countries leveraging platforms such as Angel List, LinkedIn or Crunchbase. And this is important, especially because risk capital has emerged in many countries such as Singapore, where risky innovation is more welcomed and statistically invested. In fact, my own startup was largely funded by investors from Dubai that we had met on LinkedIn. Something that would not have been possible before in time of my grandfather who resorted to self earn the funds for 5 years. That’s why its important to have a global outlook nowadays when we think about starting a venture, regardless of whether we are dealing only with domestic markets or not, these opportunities now exists in a global dimension. 

But aside from this, the internet has also led to the emergence of entirely new forms of accessible seed capital. Venture capital investment in innovative startups was risky for the financiers because you bore the weight of the entire amount invested but now the internet facilitates funding involvement from a multitude of parties through crowdfunding, allowing the risk to be distributed in a personally acceptable way for all those involved. And consequently through the power of the internet and the crowd crowdfunding has raised billions of dollars for business investments since its emergence. In 2015, alone crowdfunding has raised a total of $34 billion dollars. Notable companies such as Oculus Rift have gone this route when they couldn’t secure investments. So instead of being limited by traditional private equity, the ultimate result is that technology has evolved a new public capital market for entrepreneurship which connects all with inumerable funding opportunities that used to be only accessible by the few.

So what is the extent of this evolution? Well, through the collapse of barriers as well as the transformation of venture capital, technology has effectively democratized entrepreneurship and the democratisation of entrepreneurship has also evolved the personhood of the entrepreneur. Today’s entrepreneur looks very different from those of the previous generations. In the past decade, most entrepreneurs would begin their journeys typically in their mid 30s or 40s. It was almost like an unspoken custom that you needed atleast to have the degrees and requisite experience before you went into business. In fact. back in the day, the Elon Musk of the time was JP Morgan who was in his 50s before he even started. However, today’s entrepreneurs are getting much younger and younger. what it really implicates is that advances in technology have brought the tools of entrepreneurship to a much wider group of people. It has equalized access to entrepreneurship for all. Age, experience, education and expertise are no longer the limitations as the information age has given us all, unbridled access to an endless wealth of knowledge online and provided us with the tools for self-transformation and self empowerment. Anybody sitting here right now, could jump onto their laptops and smartphones, delve into industry information and market research and verse themselves in the intricacies of business. Such that to make an impact all really takes nowadays is the right preparation, conviction and a brilliant idea. And if I am sounding too idealistic, consider that this is practical reality, Mark Zuckerberg was only 19 when he launched Facebook creating a networth of $55 billion while changing the world altogether. 

Noticeable within this evolution is that women also now make up a significant portion of entrepreneurs globally. Traditionally, these barriers were particularly taxing on them but technology have facilitated their involvement. But in the recent G20, it was reported that women now represent up to 38% of total registered SMEs. There are even countries now where women report equal and even higher rates of entrepreneurship than men. And that is something I think we could be very proud of because in the past, we looked up to individuals, like Ford, Rockefeller, today, it is names like Arianna Huffington and Sheryl Sandberg that inspires us to action. What this means is that, technology has evolved into markets to be more inclusive where we all have larger degrees of freedom to explore all business possibilities and that diversity is no longer a hindrance but a characteristic of evolved entrepreneurship.

But not only is the entrepreneur socially evolved, technology has enabled a social evolution in business. With the rise of the digital age, the world has shrunk and become ever more transparent. You can no longer operate your business as if it exists in a vacuum. Years ago, it maybe have possible to do the bare minimum or disregard true value and utility of a business but today, you will incur immediate social and market feedback in the digital space from the likes Google, or Social Media.  This means that if your business earns a bad reputation, it’s going to be visible to all and its going to affect you.  That’s why  today businesses are now concerned about their footprints and as their overall social identity. And an extension of that is social ethics. As our societies have become more socially progressive with the changing times, we expect businesses to be reflective of this and technology has largely held them accountable to this expectation. So today many businesses have developed socially awareness. And some have even be socially driven. Socially aware businesses such as TOMS or Warby Parkers, a shoe store that donate shoes and glasses for everyone sold is doing financially well because of this. It is clear that businesses are now humanising, look at the often emotionally charged advertisements that are being pushed by big oil and big business. This stands as stark contrast to the days of history, when businesses would maximise profit by opportunistically exploiting society resulting in unethical practices such as running sweat shops or unsafe working conditions and culture. Thus truly in today’s age, a business that’s make nothing but money is a poor business, in the most literal sense and perhaps not even a business at all. The evolved business is a social business, an active and visible social actor in participating in the developments of society.

It’s evident from today’s talks that, it’s a fact of life that everything changes and evolves. Entrepreneurship is no different, and technology is the driving force of that evolution. Technology has evolved entrepreneurship to make it more accessible than ever before, it has evolved the entrepreneur and evolved the very nature of business.When we think about the ramifications of the metamorphosis that has been enabled by technology, rather than see it as only an evolution, it’s possible that we’ll look back to this decade as the beginning of our own revolution. And I say it is a revolution as it is a time when technological breakthroughs have been disruptively been into the fabric of society that not only changed the nature of starting a business but practically transformed it forever. For those of us that are willing to adapt and are open to change, it appears to be a new age of limitless opportunity. But we must not forget that whilst technology can help us get to where we want to go, but without knowing why we want to get there, the road is meaningless…