By Ciaran Brennan, Editorial Assistant, Business & Finance
The spirit of the pandemic was one of creativity and entrepreneurship. As the world came to a standstill, the world of work changed and catalysed the recent influx of startups.
Note: This piece was originally published in Business & Finance magazine, vol. 59, no. 3, available to read, with compliments, here.
When long-established businesses stuttered in the midst of the pandemic, an explosion of startups began to pop up across the country. People used their free time and disposable income to fuel their shelved entrepreneurial dreams.
The pandemic was not the sole reason for the upshot of startups, Dr. Giulio Buciuni, director of the M.Sc. in Entrepreneurship at Trinity College Dublin, spoke to Business & Finance about the phenomenon.
Dr. Buciuni posited that it was due to the “rapid digitalisation of the economy”.
“We all live with a mobile phone in our hands, and therefore it’s easy for people to get connected. Now, having access to a platform is relatively easy for everyone.
We don’t need a laptop anymore and that means that our TAM (total addressable market) is huge. It is bigger than we ever thought possible.”
The Trinity College assistant professor also said the cost of cash in recent years has also encouraged more and more people to set up their own companies.
“For the past 15 years at least, the cost of cash was pretty low,” he said.
“Interest rates were nearing zero, in some cases even negative. That created an unprecedented scenario and getting investor funding for business was great.”
“And that made lots of people think: “I have a pretty good chance of earning investment,” he added.
This combination of vast access to consumers and attractive investment climate lay the foundations for the start ups that continue to sprout.
He refers to it as a “huge wave of Start-Up Bonanza” and it seems it is possible for anyone to put in the hours and reap the benefits. Unfortunately, the realities of business prevail before good will and hard work.
“This is the problem: People believe they can become the one out of one million,” Dr. Buciuni said. “The reality is that most of them won’t even get close,” he added.
On an individual level, this may be a deterrent for the latest generation of start ups, but Dr. Buciuni spoke of the importance and value of the “one out of one million”.
“Now, the reality is that how many of these start-ups will succeed? 1%. So out of millions of start-ups, a few of them will make it. And those who will make it may in fact revolutionise or change traditional business models.”
The question that remains is how do you minimise risk and shave the odds down from one in a million? Dr. Buciuni cites steady growth as a tool for entrepreneurs to use when setting up their business.
“I’m a big fan of people who obtain financial security as full time employees. And over the years, they experiment with side projects without compromising their current stability.
“When they realise that the new project takes off or has legs, then they can go back and quit their job.”