Fintech and the startup movement

According to Alex Lazarow the startup movement is growing like daisies. Indeed, there has never been a better time to launch an entrepreneurial, technology-led project anywhere. Why is that?

To start with, the cost of cloud computing has dropped significantly and this enables startup growth with fewer barriers to entry. As Lazarow comments, anyone can now rent Google’s enormous computing power by the hour, eliminating the need to purchase and maintain your own server. Telecoms costs are also heading downward and when combined with collaboration software, it is easier now for teams to enjoy frictionless remote work.

Global markets are also looking more attractive for startups thanks to the five billion mobile phone users worldwide and the two billion people with online identities on social media all ready to be the consumers that “ over 480 innovation hubs globally and over 1.3 million venture backed companies” are looking for.

Furthermore, according to the 2020 edition of Startup Genome’s Global Startup Ecosystem Report there is exciting news about the future potential for innovation ecosystems globally.

Highlights of the Startup report

  1. The incidence of ‘unicorns’ (companies valued at over a billion) has increased. They used to only be found in Silicon Valley, but there are now 400 of them spread around the world and fintech is the core component of their success.
  2. The report ranks the tech hubs around the world, and shows that the challengers to Silicon Valley are muscling up at pace, with New York, London and Tel Aviv amongst the big contenders, including the Asia Pacific region. Indeed, Asia Pacific accounts for 30% of the leading ecosystems.
  3. Covid-19 has presented a challenge, especially in the tougher, less resource-rich ecosystems around the world. Venture Capital investment has dropped by 20% globally, plus over 72% of startups saw their revenues drop. The knock-on effect of this is the loss of employees in 60% of startups.

The way forward for fintech startups

Future success will require resilience, and Lazarow suggests it also requires a new playbook, something he explores in his recently published book : Out-Innovate: How Global Entrepreneurs – from Delhi to Detroit – Are Rewriting the Rules of Silicon Valley (HBR Press).

As he points out, it is vital that startups get it right this time round, especially as entrepreneurship is “the largest force of job growth globally.” In a positive way, this is a good time to rethink how to be an entrepreneur, rather than follow the old routes, because it’s a good time to act for success and join the startup movement.

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