Thanks to the recent recession, very little can secure the initial success of the most solid of startups. Since the turn of the decade in the new millennium, more startups have faltered and failed than prospered. One of the most recent examples of the light of initial success being extinguished too soon and too easily involves the startup Plumgrid selling its technology and IP to VMWare. After Plumgrid sold everything to VMWare, it further solidified the proof that the economy continues to be unmistakably hostile to startups and the spirit of entrepreneurship itself.
The Impact of Plumgrid’s Sellout
A fair number of people outside of the tech and small business markets may not know much about Plumgrid. Nonetheless, this startup showed promise among others to succeed for longer than it did. Still, it faced a difficult climb to success, particularly in light of the fantastic crashes and burns experienced by other startups that did their best to go up against the big guys like Cisco and Amazon.
The news that Plumgrid sold everything and pulled up stakes proved that the entrepreneur market is brutal with no signs of easing up anytime soon.
If any good news can be taken out of the fact that Plumgrid sold everything to VMWare, it is that many of Plumgrid’s employees have been promised jobs with the company that bought out their former employer. While the entrepreneurs themselves may fail, their employees enjoy a higher degree of security thanks to the deal that was struck when Plumgrid sold everything with its IT and technology.
Another positive sign is that VMWare stands a great chance of building on what Plumgrid started, ensuring that the innovation designed to benefit consumers in the future will continue despite the fact that Plumgrid sold everything to a new company. The startup may die out; however, its genius will remain and be built upon by many of the same employees that worked for Plumgrid in the first place.
The Back Info on Startup Hesitancy and Failures
When Plumgrid sold everything to VMWare, it found itself in the good company of hundreds, if not thousands, of other failed startups. Economists offer several theories for why startups are not doing well in the American business market today.
The primary reason lies in the fact that big guys like Walmart have the lion’s share of the market to themselves. When you have billions of dollars at your disposal to do business to your advantage, it can be next to impossible for the competition to snag even a morsel of the market for itself.
Second, big companies like Walmart and Amazon have taken the spirit of entrepreneurship and run with it to their advantage, even in light of the recent recession. These companies have gotten savvy when it comes to hiring and recruiting talent and vendors. They are experts at using innovations like social networking to accommodate a consumer base that increasingly favors inexpensive and accessible services and products over helping fledgling startups grow.
Finally, economists argue that current U.S. regulations make it next to impossible for startups to flourish. With taxes and mandates thrown at them at every turn, it is easier for startups to close up shop than it is to appease the fickleness of the U.S. government and entities like the IRS.
What Happens Now?
Plumgrid is the latest startup to fold to a company that has the upper hand on them in the technology market. When Plumgrid sold everything to VMWare, it became the most recent addition to a long line of startups that failed to make it in the tough post-recession economy that did its best to kill the spirit of American entrepreneurship.
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