Before taking a deep dive into startup entrepreneurship, it makes sense to discuss how the whole startup world originated. If we think of a startup as a highly scalable tech company aiming for rapid growth (we will discuss the definition of a startup more in the next chapter), we can start to look for the first startup in history.
For example, Edison General Electric company (now GE), could be thought of as one of the first startups. The growth and difficult path to victory for that company is similar to a typical startup journey. Many companies like Nokia could also be thought of as a startup in their early days.
However, none of these companies could be considered a startup in their current state as they are now large corporations.
The rise of Silicon Valley
Startups are often linked with the rise of Silicon Valley. This tech company concentration around Stanford University has had a huge impact on the technological development of the world since the 1970s. The term Silicon Valley was first coined in 1971 in a magazine called Electronic News, when it mainly referred to the companies in the area that were manufacturing semiconductors (for which the main ingredient was silicon). In the 1980s, the term Silicon Valley was used to refer to the whole area of Palo Alto, Cupertino, Sunnyvale and Mountain View, among others.
The startup boom in the area didn’t really start until the end of the 1990s when the dot.com boom took over. The belief in technology and the possibility that the internet could change the world grew to unparalleled heights. Companies like Amazon and Netscape were paving the way and created the sense that success was waiting for everyone who knew how to register a domain. Things got out of hand and the dot.com bubble burst, causing one of the biggest crashes in the global economy in recent decades.
Even though the dot.com bubble showed that every idea doesn’t have value just because it’s on the internet, the belief in technology and the internet didn’t die out.
Technology companies in the 2000s
After the dot.com bubble, the startup community learned from it, moved on, and even accelerated their speed. If we look at the American major technology companies like Facebook, Uber, Airbnb, Twitter, LinkedIn, Tesla or Dropbox, none of them existed 20 years ago – even Google was founded only 21 years ago.
The internet and other modern technologies have created huge business opportunities and the possibility to grow companies rapidly. All of the above-mentioned companies have grown into billion-dollar valuations in just a few years.
These companies have had a fundamental impact on our world. The world's largest media company, Facebook, has no content creators on their payroll. The world's largest hotel chain, Airbnb, owns no hotels. The world’s largest taxi company, Uber, don’t own a single taxi. And so forth. Technology companies have shaken many industries and captured markets from traditional companies.
The startup world today
The startup phenomenon is no longer confined into the Silicon Valley or even the US, but rather it has become a fully global phenomenon with growth centres all over the world, such as Stockholm, Berlin, London, Helsinki, Tel Aviv, Singapore, Beijing, and Tokyo. Even many developing countries have startup centres and active incubators and accelerators, enabling thus a fertile ground for new kinds of entrepreneurial ideas to grow.
What we like is that not all startups hubs are similar. For example, the startup scene in Finland has been driven by students. Around 2009, at the same time when Aalto University was founded, a group of students formed AaltoES, the Aalto Entrepreneurship Society, which has been a driving force in the growth of Finnish startup activities. The society has been changing attitudes and also created Slush, the world’s leading startup event, and Junction, the largest hackathon in Europe. The whole Nordic startup scene is different compared to others – for example, there is more and more emphasis on having a net positive impact on our world. Another example of a rapidly growing startup movement is in Asia, where many cities are active startup hubs today.
After the 1970s, when companies were manufacturing semiconductors in Silicon Valley, the startup world has changed quite a bit. Despite the bursting of the dot.com bubble and the financial crash of 2008, the startup ecosystem is alive and constantly developing. Hopefully in the future, we'll have even more startup hubs around the world as having a chance to become a startup entrepreneur should not be dependent on anyone’s background.