Do we have to wait to be entrepreneur ?

At this time, there are 7,4 Billions of people in the Earth, among them more than 4oo millions are entrepreneurs !

It’s not just about Startup, but about every kind of business that are started everyday by Women and Man motivated by solving common issues, create social contact between people and make money of course. But I want today to stay focus on something that passionate me: the Startup ecosystem !

A lot of people want to become entrepreneur and become the new “big thinker”. In other words, they want to become the new Bill Gates, Larry Page and become Billionaire. All of this is possible if you have a good idea, good connection and a lot of determination! Yes determination is the most important. Entrepreneur who succeeds are entrepreneurs who was the most motivate and determinate.

In general this kind of people want to create Startup and make of their Startup a “Unicorn” (Startup company valued at over $1Billion). And there is more and more unicorn today. Especially in USA, where there is more than 27 Millions of entrepreneurs. The competition is hard but when you succeed, it’s the jackpot !

But actually there are few problems that started to appear recently. Venture Capitalists,business angel, Incubators.. whatever they are, this organizations and people invest a lot of money money in this Startup, maybe to much. The valuation of this companies are became huge to compared to their turnovers. And today economists are all agree to predict a new crisis, not the Subprime this time but something called “the Startup bubble”.

“A lot of unicorn will disappear” Bill Gurley, Benchmark Capital

Two phenomena fueling this bubble, the first one is the FOMO (Fear of missing out) or the fear spread among investors to let the next Facebook or Uber. Then the low interest rates have redirected a portion of capital to Sillicon Valey. This situation created a big enthusiasm for Startup in this area, especially from the big American Venture Capitalist like BlackRock, T. Rowe Price or Fidelity. Consequence: the fund raised have multiplied and the last year the American Startup have raised $74.4 Billions !

The second phenomenon is the valuation of the companies. As I have said before, the “unicorns” are valued to much: $62.5 Billions for Uber, $25.5 Billions for Airbnb. The capital inflow is more and more important.

The Startup Zenefits is a good example of illustration. This Startup based in San Francisco create human ressources solution for companies. Since is creation in 2013, the founder raised $580 Millions in order to support his quick growth. And the Startup is now valued at $4.5 Billions for a turnover of a profit of $6O Millions in 2015 instead of $100 Millions provided initially. As a result the company was constrained to fire employees: 250 employees, which represent 17% of his effectif.

Zenefits is not the only Startup concerned by this phenomenon. Actually a lot of unicorns have to fire employees. The fund raised are also rarer than before. The risk is that a lot of startups valued less than $1 Billion will disappear.

So do we have to wait to see what will be the issues to this situation ?

If you want my opinion I think that there is too much money put into this kind of Startups (unicorn). But it’s not a reason to be afraid to be entrepreneur and Startup doesn’t means necessary Unicorn. Maybe it will be more difficult for people who dream about building a Startup and make this Startup a unicorn BUT don’t stop to believe in your dream ! Whatever happen, be entrepreneur is something much bigger, something that will give you so much experiences. And not only professional but also human.

Nicolas Chaillou