Clearly there's a lot of money being poured into start-ups right now, but as you mention... there was also a lot of money being pumped into companies in 1999 and by 2001, the party was over. Will the music play a little longer this time around?
I'm not completely sure. I think back in 1999 you did have more companies getting funded despite complete lack of viable business plans. Some companies like that still get funding these days, but usually a start-up has... you know... at least a vague idea of how they're going to be profitable long-term.
So in some ways I'm more optimistic, but then I see things like the $41 million plus thrown at Color, which I believe essentially has essentially a 0% chance of ever becoming a profitable company.
So I'm not sure. I think the success rate of these companies may be higher than in the past, but not dramatically so.
Still, start-ups are generally good for the economy and they do create jobs... so if billionaires and large investors want to keep funding some of these questionable ideas, I don't really see that as a terrible problem.
DennisQ, Barbara, things are going on exactly as per perspective reported. It seems one of main difference between current trend and the previuos one at "booble time" is related to location of investments. According to IDA Irland, several US startups are boosting again but hiring outside US. Could it be a temporary phenomenon or is it definitely the target (boosting yes, but hiring outside US?)
DennisQ makes a good point and uses Color as an example.Whether or not the company will be a profitable one is yet to be determined, but investors do like to put money into ventures with a proven management team and in some cases the investors don’t really understand the technology or business altogether.In Color’s case, the CEO Bill Nguyen who is a serial entrepreneur sold his last company Lala, an online music company to Apple has a track record building startups and selling them.This sometimes outweighs all other factors during due diligence with investors.
This is good news for the economy, assuming this is going to be going on for a sustainable time and not just a false sense of growth. I think it is very promising to hear the numbers coming in so far, the key factor is going to see what the numbers look like at year’s end. And if the trend continues to the end of the year, will it still be growing?
Good to hear and pleasant to know that tech jobs are opening for hiring. It is quite obvious that many investors are being careful in what they investing in, but getting people back to work is a good sign of revamping the economy. It is a good turning point. I hope it stays.
I believe Nemos has caught the point, truly; nowadays start-ups have to create not a new bubble era, but a stable era. Hiring as current trend outside US to reduce costs cannot be alone but in pairs with other criteria to sustain a real plan for business, jobs, people and market.
Nemos, this is quite different from what i have heard about the investors who want to invest in startups. Usually investors are not so much interested in let's say 5 year or 10 year plan but they look for fast return on their money. So most of the investment has been in the IT, where the product delivery time is quite short.
If investors are putting money in startups where the business model itself is for the long term then it is indeed a very good news.
According to me Startup companies have huge potentials because they are very careful in picking the stake holders and engineers. Now with a groomed economy it is definitely going to be a plus for huge hiring and lot of people venturing into small companies.
Saranyatil, I am not too sure whether startup are too picky on inverstors and employees but one thing is sure that they (and the people working in them) are full of energy and hope. I have worked in a startup and there is so much freedom to work. Most of the startups do not have hierarcy and try minimal paperwork. Good place to work and learn for fresh graduates!
I found this data surprising given the overall economic conditions. Companies that have the cash are hoarding it so the fact that investors would risk money in new start ups is surprising. It is indeed good news though and with unemployment still high, start ups have a large pool or talented, experienced personnel to draw from.
Startups and small companies are great places to work because of the many opportunities to perfronm tasks outside of the pingeonholed responsibilities that are sometimes established at larger corporations. Startups, specirfically, will be higher risk for long term employment because of the speculative nature of their existance, but they also have the greatest opportunity for rapid growth. Let's hope the economt continues to encourage new tech companies.
I'm a firm believer in the viability of our life science companies, startup on up the line. Sure employment may be a risk; it is anywhere. However if you can prove you're a producer in any area of the organization, you'll thrive. I've worked with a half-dozen or more leading biotech firms in the last 10 years and only one went through downsizing, and that was due to a relocation from which many employees opted out. And yes, FDA's procedures for product review and approval have been a barrier to product marketing, but not one that truly suppresses R&D.
Tvotapka, I agree ... although my experience has been in the tech manufacturing area (perhaps a little more volatie), my most rewarding jobs have been with small companies. They almost always provide an better environment for organizational and personal growth.
And I'll bet you found the smaller organizations quicker on the draw whenever a major change needed to be implemented. A good friend of mine once used the analogy of a ferry we both used often. Once the ship pulled away from the dock it had to do a 180-degree turn in a narrow harbor before it got underway. As you might figure, this was slow process. Methodical and on target, yes, but slow simply because there was so much mass to move. This is often the case in corporations, even though it doesn't have to be.
The smaller the organization or group, the more important a role each member plays in its survival. This often creates a level of necessity to move more efficiently. Afterall power equals the speed at which particles flow. In the case of an organization the particles are the bits of data (information, orders, invoices, approvals, etc.) you must move through the organization.
A good, 7-division organizing board can lay out the pattern very well so that when the group does expand, it will be far less likely to get bogged down in its own tracks.
Barbara, this is a highly welcome news. It is a good a cheer in the present global economic climate - I think its a step forward in the right direction.
The fact that the report recorded 83 percent planning to hire this year nationwide indicating an increase in hiring already in place for startups businesses in IT, Health care and Customer service industries, is pleasing to hear.
Provided this is happening as the report stated, further growth impediments are surmountable. This is beneficial for the economy and the political environment too, so with a bit of lobbying and envidence that something is moving well in a positive direction as indicated by the report,equity access would somehow open up to sustain the growth - don't you think?
I agree this is good news and, if the money continues to be invested in start-ups, they may be able to buck the overall economic trend. The problem is at some point, unless there is a marekt for new products, the money may dry up. I agree the current economic market conditions make everyhting look risky, but if investors have faith in the business model and continue to invest, these compnaies may set the pace for the next stage of economic growth
It is good to hear the startups are on rise and the job opportunities are also rising. Lifesciences sector is really a big regulated industry beside avionics and automotive. Is there any detailed report avilable on the tech start ups like what are the different sectors these companies are actually going to serve.
Our company has the head-quarters in the Sillicon Valley and we can see in first hand the invesment and partnership of medium - large corporations, our company change the bussines model quite often to accomodate the rapid growth and customer demands, market condtions look promising.
Good to hear that tech starups are optimistic about hiring. But I am not sure if this optimism is going to sustain. One of the biggest threats to this optimism is rising inflation and rising commodity prices. Moreover as the Fed becomes freer and easier with money, the markets become more volatile, undisciplined, and risky.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.