Is The Current Tech Startup Scene a Bubble?

Right now is a great time to be an entrepreneur or investor in the tech startup industry. There are more and more startup companies being created every day and innovation is continually rising higher and higher. Before you quit your day job to start your own tech company or even take out a second mortgage to invest in some nifty idea, there are some factors that you should consider. Keep in mind that the economy has seen these types of explosions before. Whether it was the dot-com bubble of the 90’s or the housing bubble after the turn of the century, industries come and go. As you may have noticed, both of these bubbles burst and made a havoc of plenty of people’s lives.

With all of this in mind, the question remains as to whether or not we are currently in a tech startup bubble? After all, some people would argue that only so much innovation can take place before it tapers off, right? Well, the answer may still be a bit unclear. However, here are some things to keep in mind during this explosion of tech startup businesses.

It’s Cheaper Than Ever To Start A Business

Just a decade ago it would cost someone tens, if not hundreds, of thousands of dollars to start a new business. You had product that needed to be bought, research that needed to be tested, a facility to rent and, on top of it all, employees that needed to be hired. However, business now is completely different and many of these factors matter much less. For example, online businesses can be done from someone’s house, eliminating a huge cost for overhead. On top of that, many new businesses are based completely off technology, meaning that physical product is much less of a concern.

The World Continues To Be More Connected

The internet has provided people with the resources of connecting with unknown parts all around the world. Granted, there are still plenty of places that hardly have a reliable internet connection, but the number of people with internet continue growing on a daily basis. This growth means that startups now have more customers to market to. It also means that these startups have a greater chance of sustaining themselves, especially as more people can access the internet.

More Growth Means More Possibilities

Have you ever heard of a serial entrepreneur? It’s basically just the idea that people who achieve success with entrepreneurship will only continue to reach and strive for more achievements. You can see that there have already been a load of successful startups in recent years. You’ll also notice that if these startups are purchased or bought out, the creators typically take their money and go start something new. This means that even more startups will continue to be built and ideas will continue to grow.

The thing to keep in mind here is that online startups may look a lot similar to that of the dot-com burst in the 90’s. After all, that was online, made businesses less expensive and connected everyone together. However, maybe it’s possible that the dot-com bubble burst simply because the internet hadn’t reached the entire globe yet. Instead, it was in the early stages of the internet, when most users were in the United States. Now the internet is available around the globe, meaning there is much more available options to market to. As to whether or not the startup scene is a bubble that is waiting to burst, that is to be seen. However, it’s unlikely that it’ll burst in a way like we’ve seen before, simply because it’s built on innovation and ideas, which are two things that’ll never stop growing.