Entrepreneurship’s evolution

The emergence of empires of one, business colonies and seed capitalists

The importance of stimulating entrepreneurship has not been lost on Asian nations. Communist Youth League of China will set up a fund to help young people establish their own businesses, as part of efforts to ease employment pressures, particularly among graduates, China.com reported in February.

According to figures from the Chinese Academy of Social Sciences, 1.5 million college graduates may have failed to secure jobs by the end of last year. A further 5.92 million new graduates will enter the job market in 2009.

Local governments are also offering favorable policies to boost employment prospects. For example, Hangzhou offers college graduates guaranteed loans of 50,000 to 200,000 yuan ($75,000 to $300,000) to help them start up their own firms.

Another Asia story

The U.S. is the oft-cited leading nation for startups. Forbes notes that some $30 billion goes to 4,000 investments. Sounds impressive until a would-be entrepreneur strikes out seeking cash for start up in this tight-money economy.

Risk aversion seems a common and frustrating theme among nations that would like to emulate the U.S. Japan has been feeling the pressure of a decades-long recession but still has not found the magic formula to entice investment. It has found the business climate too resistant to invest in startups.

Empire of One business model

An Empire of One business is a one-person operation (though, sometimes a married couple) with far reaching spheres of influence. Typically the Empire business outsources most of its functions: Information products are marketed and sold online, coaching and consulting operations and products are manufactured in China or India and then sent to a distribution center in the U.S., with customers in the U.K. and Brazil. Manufacturing, marketing, bookkeeping, accounting, legal needs and operations are all outsourced to other businesses around the world.

In addition to product-based businesses, other Empire models will include coaching and consulting businesses, freelancers, Internet-based businesses, solo practitioners and many more.

These are not novel concepts. The difference is mostly size. Street savvy may have once dictated asking often and asking for a lot of investment money. But this advice fit a different time.

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By Thomas Frey and Raymond Alvarez