Startup Technology Firms — The New World Economy?

Startup funding firm Y Combinator, based in Mountain View, California, recently concluded its three-month program at which it provides advice, funding and connections to fledgling startups with its Demo Day, and the reports from this event indicate that the 2010s are becoming more and more of a boom time for startups.

Jason Freedman, who co-founded the startup office broker startup business incubator 42Floors reported a radical change from the particularly bleak economic climate of 2009. “We saw 500 eager investors, frenzied almost, excited to invest in entrepreneurs,” he writes. “One investor emailed me four times, texted me three times, called me and sent me a message on LinkedIn — desperate to get a check in before the round closes…Founders with no experience fundraising and no pre-existing networks, making connections with top tier guys. It was really a sight to see.”

The bright future for the startup industry has given numerous people the impression that the success of technology startups will be the driving force in the new world economy. Due to the rise of cloud computing and a growing trend toward user-friendly operating system interfaces, the costs, financial and otherwise of founding and running a technology company has drastically decreased; whereas the high profit margin owing to reduced expenses has drawn the attention of enthusiastic investors. That being said, an awareness of what the market calls for is also a considerable factor in a young company’s success. At the Y Combinator’s most recent Demo Day in 2012, nearly half of the companies were primarily focused on practical mobile applications.

Although it is too soon for any lingering worries regarding the state of our economy to completely vanish, the atmosphere at Y Combinator’s Demo Day seems to indicate brighter days ahead.

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