If you’re an entrepreneur, you should be excited. Mechanisms that kept large corporations at the forefront of capitalism are quickly becoming obsolete. Digital marketplaces, new business models and other technologies are making it possible for small groups of people bringing products to market to yield multi-million dollar profits. For the first time in history, small business and big business are set to play on an even field.
When it comes to distributing a product, the barrier to entry has vanished. Last year, Amazon surpassed Walmart as the world’s largest retailer, while Walmart itself announced it will be closing 269 stores. Digital marketplaces like Amazon, Etsy and Apple’s App Store are the department stores of the future. While it used to be that what was on the shelf was what got sold, the internet has made it so every product has a place on the shelf. This is a cataclysmic culture shift. An internet-centered marketplace for products and services provides a huge opportunity for entrepreneurs. It eliminates the need for small businesses to provide their own physical venue to show off a product while simultaneously allowing them to easily promote sales. Internet marketing is much more cost effective than other forms of advertising, and social media allows smaller companies to stay connected with consumers.
The same revolution is happening in the service industry. Tools like Uber and Fiverr connect people looking for services, like a ride downtown or someone to fix a broken sink, with those who provide them. In addition, by allowing customers to rate the quality of these services, the importance of name recognition and brand loyalty — once monopolized by big business — is lessened and replaced with stabler smaller-scale trust.
Digital products have also become one of the largest industries in the world. As of 2014 more video games are sold digitally than via disk, and the industry itself is now bigger than the music and film industries combined. By the end of 2016, nearly one in three people worldwide will own a smartphone. Games, apps and digital entertainment have become some of the best ways for entrepreneurs to get a start, with software being one of the easiest products to engineer and distribute from home. With content delivery platforms like the App Store and Steam, the process for software developers is simple: Make it. Sell it.
At the same time, the market is adapting to make it easier for small businesses to manufacture and ship products to consumers. Fulfillment by Amazon is one such service which allows businesses, no matter the size, to store products in Amazon’s warehouses. When at one point a small business would have to find funding to construct or rent warehouses and implement the logistics of a global operation, now the apparatus is already in place and ready to use. Amazon handles the packing and shipping when the product is bought and the customer service afterwards. Being the largest retailer in the world allows even the smallest product lines to be available globally.
3D printing is also rapidly evolving so that it can be used for mass production, having advanced leaps and bounds since the first commercial printer was made available in 2009. Even now 3D printed bolts and parts are used in military equipment such as the M777 howitzer. While a 3D printer might seem like a big investment for a college student, from a business standpoint the cost is minuscule.
All of these things point to a larger trend. The tools required to participate in the global marketplace are being compartmentalized and made available to the small guys. The success of a product no longer has to be the task of a single entity. All the elements that go into the process from design to manufacturing, distribution and marketing can be divvied up and satisfied by different services or even by different companies. In the past, the strategic benefit of a large corporation was its ability to efficiently connect consumers with its products; however, digital marketplaces, apps and services like Amazon Fulfillment now serve the same function.
For entrepreneurs this is a godsend. The ability to outsource the more labor-intensive parts of business management allows entrepreneurs to focus more on their craft and on innovating while also keeping costs down. It also gives them a key advantage over big business: the ability to be nimble and react quickly to new market trends. With product designers and engineers able to focus solely on the product itself, they can invest more time in implementing customer feedback, coming up with new ideas and conducting research. It is now much easier to swap out interchangeable parts of a business — like marketing and distribution — when things aren’t working well. Big business, on the other hand, can sometimes be tied down by bureaucratic procedures. By working in tandem with these online services and with each other, small businesses can compete directly with longer-established brands and businesses.
There really is no better time to be an entrepreneur.