American Startups Are Dying. Anyone Give A Shit?

Happy 4th of July.

Entrepreneurship is on a serious, long term decline in the USA.

And that is not fake news.

This is the biggest problems facing the American economy now.

And, almost no one in the main stream press is talking about it. And I have not heard one American politician raise this as an imporant issue in the current election season.

That’s why we just published this podcast episode.

And why I’d love you to read this amazing report from the smart people at The Brookings Institution.

Firms under the age of 10 made up just 19% of employment in 2015, down from 33% in 1987.

The scary thing is, The Brookings Institute sees this as a long-term trend. That the disappearance of startups is ongoing and not primarily a cyclical phenomenon.

They also state that, the fall in startups since 2000 was particularly pronounced for high-tech firms.

We are living in an economy where the category queen/king economics is playing out. The report says that markets are more concentrated and less competitive than they were a few decades ago.

From 1997 to 2012, revenues of the top four firms in any given industry rose from 24 percent to an astonishing 33 percent of total industry revenues.

This data supports the idea that increased market concentration is making the environment for start-ups hostile. Potential entrepreneurs look at the marketplace and are faced with the question of ‘how can I compete?’

US Governments Fuck Startups

Government subsidies are also deterring would be entrepreneurs. New businesses must compete with larger and established business that are receiving said incentives. Our governments are creating an environment that is attractive and beneficial for big incumbents and hostile for start-ups.

Small entrepreneurs rely upon their savings, friends, family and banks which are currently not lending to start-ups — at almost record levels! Many also rely upon their home equity as a source of capital.

The Brookings report states that “Places with larger collapses in housing prices experienced larger reductions in high-propensity business applications”, suggesting that home equity is an important source of capital.

Please check out the podcast and more importantly read the report.