September 22, 2014

Cost of Starting Up is Lower than Ever

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Joe Kraus, founder and CEO of JotSpot, writes that it’s a great time to be an entrepreneur because it’s never been cheaper to launch a company.

He points out that Excite.com took $3 million to get launched, but that JotSpot took only $100,000. He attributes the cost differential to four factors:

    • Hardware is cheaper;

 

  • Infrastructure software is free;

 

 

  • Access to global labor markets means inexpensive access to talent;

 

 

  • Search engine marketing lets you affordably reach small markets.

 

While his thoughts primarily describe Web technology startups, it’s not hard to see how his thoughts would apply to other kinds of businesses.

And what are the implications? He suggests we can expect more people to be entrepreneurs (since more people can raise $100,000 than $3 million). He also suggests we will see more companies “bootstrapping to profitability.”

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Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

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