Economic conditions have sidelined most Venture Capitalists, and start ups are on the rise. There are several reasons for this. Since the passage of Sarbanes Oxley, there has been and chill on IPO’s leaving VC’s fewer options for cashing out of their successes. The crash high risk derivatives has removed mountains of available capital while further eroding confidence in government oversight.
As we enter the Third Pipe era, many middle managers and senior technologists are finding few opportunities after being laid off. At the same time, more young people are finding self employment more attractive than enduring the hiring process for a job that may not be that secure. Enabling this are the are new, better, cheap or free tools of the Third Pipe world.
The reason startups no longer depend so much on VCs is one that everyone in the startup business knows by now: it has gotten much cheaper to start a startup. There are four main reasons: Moore’s law has made hardware cheap; open source has made software free; the web has made marketing and distribution free; and more powerful programming languages mean development teams can be smaller. These changes have pushed the cost of starting a startup down into the noise. In a lot of startups—probaby most startups funded by Y Combinator—the biggest expense is simply the founders’ living expenses. We’ve had startups that were profitable on revenues of $3000 a month. (Paul Graham)
Beyonf the startup, Self employment will grow exponentially in the coming months. Tasks typically completed by employess if the corporate world will be more frequently done by contractors. As technology changes work functions rapidly, more requlations and requirements for permanent hires will mwke them increasingly rare in the coprorate world.
For those if us who embrace change, the future is bright if less certain. For most of us, the era of exchanging freedom for the security of a position with a big company is gone. The shift is as simple as taking the task that you may have done for the corpzilla, and performing it for a variety of clients on your own. He (or she) who embraces this change gets the gold.