Americans have always valued entrepreneurship. The classic American success story involves arriving as an immigrant, starting a business and scaling it up into something impressive. While that’s an enduring template, it’s essential to acknowledge the way entrepreneurship evolves. The economy is always changing, and the roadmap to business success changes from era to era.
For the year 2020, there are several significant trends to note when it comes to entrepreneurship. The first is the type of people who are starting new businesses. In 2020, many entrepreneurs are young. Four percent are under 30. That’s not a huge percentage, but it’s a significant number of individuals. Remarkably, so many young people are taking substantial risks early in their careers.
The second trend of note is the type of business people are starting. Instead of opening stores or becoming general contractors, most new businesses are service-related. That can mean business services, food service, or lifestyle services like coaching and personal training. The knowledge economy is becoming more important all the time. General retail and home services each account for less than 10% of the new businesses being started.
The way that entrepreneurs are going about their business has also changed. In the past, it was an advantage to be able to do more than one thing well. That was true of many retail and service-based enterprises. With the ubiquity of Amazon and Walmart, there’s no need for more entries into that market. The real way to succeed as an entrepreneur in 2020 is to niche down. By providing a particular service to a specific market, new businesses can thrive. The detail is where many people and businesses need the most help right now.
Another trend in the way new businesses are coming together in partnership. In the past, there was a big dividing line between tech and other industries, especially in the startup phase. Today, it’s common to see partnerships where one party handles the marketing and sales, and the other controls the coding and development—finding a trustworthy partner with a complementary skill set has always been a key for business success. It’s good to see effective communicators and great engineers coming together and achieving greatness.