Thinking About Starting an Online Business? 2023 Is the Right Time to Do It. Here's Why. Let's look at a few big reasons why 2023 will be a great year for digital entrepreneurs.
By Blake Hutchison Edited by Kara McIntyre
Opinions expressed by Entrepreneur contributors are their own.
One of the big stories of the pandemic, especially during the early uncertain days, was the rise of entrepreneurship. Millions of Americans started new businesses and side hustles, experimented with working from home and expressed an openness to new ways of creating economic value. Recent data from the U.S. Census Bureau on Business Formation Statistics found that the pandemic's burst of entrepreneurship was no one-time fluke: Americans formed more than 5 million new businesses in 2022, representing a 44% increase in new business formations compared to 2019.
It appears that the 2020s boom in entrepreneurship is here to stay — and that's good news for the digital economy. Despite some recent gloomy headlines from Silicon Valley and Wall Street and some painful downturns in the stock market, there are strong signs that 2023 might be an even better year for entrepreneurs to start a business — especially in the online small business space.
Let's look at a few big reasons why 2023 will be a great year for digital entrepreneurs.
Related: 4 Reasons Why an Online Business is the Best Investment You Will Ever Make
Big Tech layoffs lead to new opportunities
Just within the past few weeks, we've seen thousands of job cuts at Big Tech companies like Google, Meta, Microsoft and Amazon. Of course, these job losses are painful in the short run for the affected employees and their loved ones; no one likes to get laid off. But this temporary pain can lead to bigger opportunities for the future.
Thousands of entrepreneurs with valuable, in-demand tech skills are now looking for their next gig. Some of them might want to start their own business, and some might band together to launch a new startup with their colleagues; some might want to consult, while others might want to invest in acquiring an existing online business.
There's going to be an unleashing of human capital and ingenuity that was concentrated at a few big companies; this is ultimately going to spark new growth in digital entrepreneurship. Lots of great companies get started during an economic downturn when customers are looking for new innovations and there's less competition and noise in the market.
I'm excited to see what new ideas and innovations emerge from today's Big Tech layoffs. There are people getting laid off today who might become the CEOs of the next decade's biggest success stories.
Related: Laid-Off From Your Big Tech Job? It Could Be The Ideal Time to Pursue Entrepreneurship.
Strong opportunities for "Main Street" online businesses
Publicly traded Big Tech companies have attracted lots of hype and massive investment in the past few years, but the digital economy is not just about these large public firms. There is a very large underrated area of the digital economy that we call "Main Street" — sub $10MM revenue businesses including blogs, apps and ecommerce stores.
There are lots of ways for entrepreneurs to make real money with online businesses, and it can often be done with limited upfront investment and minimal overhead costs, such as starting a Fulfillment by Amazon (FBA) business. Starting a content-based website or blog can help digital entrepreneurs serve a unique niche and build a loyal audience of fans, followers, and repeat customers. Mobile apps continue to be the center of people's everyday lives — and there are big opportunities for helpful, profitable mobile apps that can provide a useful service.
The next wave of innovation in the digital economy is going to come from small online businesses. These are often generating steady revenue and offer big upside potential for growth. Look for more entrepreneurs to explore the Main Street of the digital economy.
Freedoms of being your own boss
The continuing boom in new business formations, worker shortages in many industries and the rise of remote work are all strong signs that entrepreneurs are fed up with the traditional corporate workday grind. They want to create value on their own terms, be productive on their own schedule, enjoy better work-life balance and unlock opportunities for themselves in new ways.
Online entrepreneurship can be a huge force in this larger transformation of how people work and live. When you own a digital small business or other digital assets, you can work from anywhere in the world. You don't have to punch a clock or report to a manager or be surveilled by an employer. You don't have to ask permission to go on vacation. You can explore new business ideas, try new things, launch new products and discover new markets without the bureaucracy and limitations of a traditional employer.
The pandemic caused millions of people to reassess what they want out of life, where they live and how they work. The freedom and flexibility of digital business ownership can be a good fit for many new entrepreneurs.
Related: 5 Steps to Start an Online Business and Living a Much Better Life
High-growth online businesses categories
Digital small businesses offer many flexible models to help entrepreneurs capitalize on the newest trends and consumer lifestyle shifts. No matter what customers are demanding now, digital small businesses are adaptable and well-positioned to deliver it. A few high-growth online business categories that I'm hearing about from digital entrepreneurs right now include fitness, travel, health, finance and pets.
Think about how consumer behavior has changed in the past few years. People want to focus on their health and wellness; they want to exercise and feel better; they want to take vacations; they want to improve their financial situation; and they want to pamper their pets.
All of these consumer needs are well-suited to online business ownership. There are many creative ways to build relationships with customers in these categories with valuable products, advice and professional services.
Acquiring existing businesses as an investment
2022 was a terrible year for the stock market and lots of investors got burned by meme stocks and overhyped alternative asset categories. What if there was a better way? Investing in online businesses by buying an existing website or other small business can be a great way to invest, and these digital small businesses never got overhyped or overvalued. In fact, some digital small businesses are delivering 30% or more annualized returns.
Acquiring an existing business is often faster, easier and lower risk than starting an original business, and acquiring a business gives you the reassurance of knowing that this business is generating real revenues and has a base of users, customers and web traffic to build upon. Look for more investors — individual entrepreneurs and larger aggregators and institutional investors — to buy into online small businesses as an investment category in 2023.
Bottom line: Despite some gloomy headlines from Wall Street and short-term pain for Big Tech, the future is bright for the digital economy. One of the biggest growth areas in tech for 2023 will be on "Digital Main Street," in small online businesses like mobile apps, SaaS solutions, ecommerce stores, blogs, content-based websites and other digital assets. Small online businesses can spark big growth and open up a new era of digital entrepreneurship.
