This Tweet from my friend Nicholas Lovell got me thinking about the changing dynamics of starting companies generally:
RT @LewieP: It is easier to make a game so more people make a game so it is harder to sell a game. <- this is something many miss.
— Nicholas Lovell (@nicholaslovell) April 9, 2014
Just as it is getting easier to make games so it is getting easier to start companies. Both the amount of money required and the depth of skills required have fallen precipitously, the first driven by open source software and cloud computing and the second by the improving quality of tools, services and advice available to entrepreneurs. (Note building a successful company is still very difficult, it is just the starting that is getting easier.)
As with games the result is that increasing numbers of companies are started each year.
As with games that makes it harder to stand out from the crowd.
The keys to standing out from the crowd are to have a great idea, to execute well and to generate momentum. Early adopters, investors, and the press are always looking for hot new companies that exhibit these characteristics and they have good systems to find them. However, because the number of startups is increasing the bandwidth available to look at each one is declining making it harder for companies to get anyone to take a second look if their execution and/or momentum falters.
Hence it is increasingly important to execute right first time.
(Side note: experimentation and failure are part of good execution in a modern startup so long as the experiments are thoughtful and learning driven.)