The Rise of Professional Level Tools Leads to Record Numbers of Tech Startups

The Rise of Tools Leads to Record Numbers of Tech Startups

In today’s tech world, building a startup and selling it to Google or Yahoo for a million dollars is no longer shocking. In fact, we’ve seen multiple apps, businesses, or services built by teenagers that are selling to the aforementioned tech giants for millions – or even billions – of dollars.

We’re seeing simple gaming apps like Candy Crush, Flappy Bird or 2048 which are extremely light on graphics or ground breaking features that are making tens of thousands of dollars a day, or being flipped to larger companies for huge profits. The common factor in all of them? They are built by relative unknowns and reaping huge revenue numbers, seemingly overnight.

Are the youth of today smarter than they were in generations past? Well, they have an infinite amount of information easily available so it’s easy to argue that they are, but the easy correlation between cyber millions and tech entrepreneurs isn’t stemming from intelligence alone.

The availability of pro level tools – whether paid for or of dubious ownership – is leading to a new sort of internet gold rush that sees many startups (with shoestring budgets) pocketing fortunes in a matter of months.

Whether it’s Sketchup for easy mockups and prototyping of physical products, Total Video Converter for conversion of multiple forms of video, or even free options such as Apple’s Xcode, these sorts of pro-level tools are essentially the backbone for this new breed of tech startup. Even powerful code editors that were once only available in Adobe’s relatively expensive creative suite – such as Dreamweaver – are free, powerful and at your fingertips.

Today’s entrepreneur has a whole host of tools available to him that have never been available in the history of entrepreneurship, and it shows. By the numbers (according to the Bureau of Labor Statistics), the number of startups has been decreasing since 2006. No shock here, as it’s right before the 2008 recession, and coincides with the banks beginning to tighten up their wallets when it came to lending. Now, that stat doesn’t tell the whole story. While there are fewer and fewer startups each year, the amount of earnings has risen every year since 1997. So, to summarize, you have less actual businesses being started, but the amount of money that each of them makes increasing, and not just at the level of inflation. Earnings have risen incrementally higher than inflation every year during that time frame and have reached the near-bubble status that we’re in now.

The stat that you won’t find in the charts above is the number of freelance operations. Dong Nguyen, hit a vein of gold when he created the uber-successful, Flappy Bird. Dong created the game on his own, so you have to wonder how skewed the stats are when attempting to figure single app creators (Dong has actually created multiple apps) that wouldn’t necessarily be considered a “business.”

These freelance operations are built entirely on the tools mentioned above, and they’re making huge fortunes for less startup cost and operating revenue than has ever been possible at any point in history.

They say that tools make the man, and it appears that this may be the case in the digital world as well. With each passing year, and with each tool that makes formerly difficult tasks into those that are now more accessible than ever, we’ll continue to see the one-man operations – as well as the small teams – take on the big boys in the digital marketplace… and sometimes we’ll see them walk away as billionaires.

Image Source: Startup Diagram Structure