Over the past 20 or 30 years, entrepreneurship has become democratized—and that’s a great thing, for the most part. But if we’re to better understand the tenets of entrepreneurial democratization and keep pushing for positive changes, we need to delve deeper into this topic.
What exactly is entrepreneurial democratization? How did it develop? And where can it go from here?
What Is Entrepreneurial Democratization?
Let’s start with the term entrepreneurial democratization. Democracy is a system of government we’re all familiar with—one in which every individual has a say. But democratization in this context refers to accessibility; in other words, how easy is it for a person to engage in this activity?
Democratized entrepreneurship means it’s easy for people to start businesses of their own, regardless of their background, their current income level, their previous knowledge and experience, and other factors. Over the years, this has increased sharply; today, almost anyone can start a business with minimal hurdles, depending on the model they choose.
Why Is Entrepreneurial Democratization Important?
Why is this an important topic? Democratized entrepreneurship offers a lot of advantages. For individuals, it means more freedom and flexibility when it comes to starting businesses. If you’re down on your luck, unemployed with no savings, you still have a chance to make something of yourself by creating a business from scratch. If you’ve spent 30 years building a career in one specific niche, you can still pivot and try to start something new.
It’s also important from a societal, economic, and cultural perspective. More accessible entrepreneurship means more people are going to be interested in starting businesses. New businesses lead to further technological innovation, more job creation, and profound economic growth in surrounding areas.
So what is it that spurred this great age of democratized entrepreneurship?
Website Builders and the Information Age
First, we need to acknowledge the role of the internet and all the marvelous tools that have come along with it. These days, it’s easy to build a website thanks to the prevalence of website builders. Using one of these innovative tools, you can design your website for free using basic templates—even if you have no previous coding or design knowledge and no money to pay a professional for help.
It’s also enormously beneficial to be able to consult the entirety of the internet when researching your business plan and making plans for the future. With a simple Google search, you can instantly see who your competition is, learn more about your target demographics, and even find a business plan template that you can use as a starting point for your work.
Marketing Tactics and Outreach
The internet has also changed the landscape of marketing and advertising. These days, digital marketing reigns supreme. With even a small budget, an entrepreneur can easily invest in a strategy that has the power to propel their business to competitive dominance. You can focus on writing and popularizing online content and optimize your site for search engines, practicing search engine optimization (SEO) to rank higher and earn more organic traffic. You can leverage the power of social media platforms, where it’s free to create an account and make new posts. You can also tap into pay per click (PPC) ads to drive guaranteed traffic to your site for a fixed fee per visitor.
The diversity of marketing options, the low costs, and the low barriers to entry here make it easier than ever to support a growing business.
We’re also seeing a new wave of entrepreneurial interest. People have always been interested in starting their own businesses, whether they want to make a lot of money or just have more flexibility in their daily schedule. But we’re seeing a massive resurgence of entrepreneurial interest that has created an environment that’s even more favorable to launching a new business.
For example, there are dozens of entrepreneurial podcasts to listen to. There are probably countless meetup groups and organizations in your city. There are hundreds of channels where you can find mentorship, peer support, and guidance. No matter where you look, you’ll be able to find encouragement when starting a new business.
These days, it’s possible to start a business with minimal education. You don’t need a formal background in business. You don’t need a master’s degree. All you need is a great idea, a solid understanding of business financials, and the confidence to make a compelling presentation to the people who might fund or support your business.
Loans and Financial Accessibility
This is also an era of unprecedented financial accessibility for entrepreneurs. For starters, we should acknowledge that it’s cheaper to start a business than it’s ever been before. You don’t need a physical retail space; you can sell online. You don’t need a factory to produce goods; you can sell digital services. You don’t even need an office space; you can operate remotely. And you can call upon countless online tools and educational resources to get almost everything you need for free.
If you do need more money to start a business, it’s relatively easy to get it. Business loans have lax requirements and low interest rates, and active angel investors and VCs are always looking for the next hot startup.
The Spark of Innovation
Modern innovation looks different than innovation of the past. To truly innovate 30 years ago, you might have needed to invest millions of dollars into a factory, utilizing some relatively unknown chemical process to make new materials. These days, you can innovate just by writing a new piece of software.
It’s possible for a single individual to innovate and make technological progress, even with limited experience. A single app can change the world.
Incubators and Accelerators
Have you noticed any new incubators or accelerators in your city? I’m guessing you have. These organizations are dedicated to helping entrepreneurs succeed, giving them mentorship, direction, advice, and sometimes even funding to make their business plan a reality. And they’re becoming much more popular. Knowing that such an organization exists might be enough to push someone over the edge, encouraging them to pursue entrepreneurship. Getting involved with an accelerator or incubator can also greatly increase your chances of success and give you a chance to help other entrepreneurs like you along the way.
In addition, the software tools (and the comparison sites that promote them) for small business are extensive, making it easy to find something that fits a need. Today’s entrepreneurs have a multiplicity of tools that are table stakes for managing a small business (e.g. CRM, marketing, finance, etc.). But sometimes overwhelming to make a decision due to analysis paralysis. Luckily, other entrepreneurs can help provide the reviews and feedback to help for quick decision making, which is one of the biggest boon for small business owners. Most entrepreneurs make decisions based on recommendations.
Where does it go from here? If we’re lucky, entrepreneurship should become even more democratized. This trend has built a lot of momentum over the years, and it’s likely to accelerate even further. These are just some of the developments that could help it flourish:
Hopefully, we’ll continue to see entrepreneurship become further democratized. With more people starting businesses, more people investing in businesses, and more people interested in entrepreneurship in general, we could see marked economic benefits for decades to come.