I had a great breakfast meeting this morning with someone who works extensively with the angel investor community here in NYC. Although the focus of our conversation was NYU's hosting of the 2006 Northeast Regional VCIC Competition, we talked a bit about the role of angels and how that role may grow in the future, because of lower start-up hurdles.
Fortunately for, me I had just read Joe Kraus' post - Bnoopy: It’s a great time to be an entrepreneur. Joe gives several great reasons for why starting a web 2.0 company is so much cheaper than one just 8 years ago. He mentions cheaper hardware, software, labor and marketing as key reasons.
Jeff Clavier looks more at the other side of the equation, adding that you can monetize niche markets better than ever before through advertising.
One other driver that I think is important is that it is now possible to add value in smaller doses than ever before. With the infrastructure of web services and interoperability on the web, someone can add value with just one layer of code. Housingmaps is a great example of this - 10, or even 5 years ago, no one could add value by tying together two easily exposed interfaces (in this case Craigslist and Google maps). While no one is going to become the next googlionaire off one of these ideas, they'll probably be great at providing a stable cash flow. And if a serial entrepreneur can build enough of these into a portfolio, that can add up to a pretty nice life.
Web 1.0 made it possible for the little guy to compete with the big chains - but most of what really succeeded were the little guys who were able to grow quickly. This time around, we have enough infrastructure for entrepreneurs to succeed even if they decide to stay little.