The next generation of entrepreneurs

Starting a company in 2013 will be like planting a seed in the desert. Only the hardiest will survive and flourish. Even more than usual, the world will need imaginative and insanely hardworking entrepreneurs to create new businesses and expand established ones. Fortunately, there is no shortage of drive or talent.

Jack Dorsey will turn Square into a household name. Mr Dorsey, who got his first job by hacking into a courier firm’s computers to show the boss how insecure they were, made a fortune from co-founding Twitter. Square, his latest venture, allows individuals to accept payments by credit card via their mobile phones. Competition will be intense, with Groupon and Paypal also offering similar services. If mobile-payments can work in Kenya (where they are widespread), why not in rich countries, too?

Another Silicon Valley face worth following is Aaron Levie, the young, scruffy and affable founder of Box. Mr Levie’s firm is developing a software platform that, Mr Levie hopes, companies will use for all of their in-house communication: sharing documents and designs, keeping customers in the loop and so forth. Early adopters find Box user-friendly, and it keeps getting better.

Pinteresting
Charles Krauthammer, a pundit, once said of Rupert Murdoch, the founder of Fox News, that he “discovered a niche market in American broadcasting—half the American people.” Ben Silbermann did something similar when, with two others, he founded Pinterest. Its “social curation” service is aimed squarely at women, a group often neglected by macho techie types. Pinterest allows people to create online scrapbooks of their favourite photos, recipes and passages from “Fifty Shades of Grey”. In 2013 many more will join the craze.

Word of mouth travels so fast these days that many start-ups are multinational from day one. When Jane ni Dhulchaointigh started selling sugru, a do-it-yourself material, she found customers in 21 countries in the first six hours. Sugru is like modelling clay but sticks to nearly anything. It can be used to attach objects to each other or to fix things. It is pretty darn useful. Because satisfied customers tell each other about the product online, Ms ni Dhulchaointigh, an Irish-born Londoner, expects sales to take off in 2013.

Hardship sorts the brilliant from the mediocre

China faces a tough year. Competition will intensify. Big firms will go bust. Several Chinese car brands, for example, will vanish. Start-ups will find it even harder to grab crumbs of the capital that China’s state-owned firms hog. The Chinese entrepreneurs who will do best will be those who focus on China’s vast domestic market.

Victor Koo (Gu Yongqiang) is worth watching, because that’s what hundreds of millions of Chinese people feel about the videos he sends to their mobile phones. Chinese state television is censored and dull. For zippier entertainment, young Chinese prefer short soaps and even full-length films beamed to their handsets. Mr Koo’s firm, Youku Tudou, charges for blockbusters and sells ads with other programmes. Thanks to the ubiquity of smartphones in China and the people’s hunger for entertainment while they are stuck in traffic, it will grow fast in 2013. Unless the Party decides to spoil the party, of course.

African economies will grow healthily in 2013, so African entrepreneurs will have plenty of opportunities to sell people their first cars, dishwashers and air-conditioners. Among the bright sparks is Bright Simons, based in Ghana, whose firm mPedigree sells technology that allows people to use their mobile phones to tell whether drugs are counterfeit. This addresses a huge problem—fake pharmaceuticals are as rife as they are dangerous. Mr Simons will expand mPedigree in Africa and South Asia in 2013.

Some entrepreneurs create new products. Others find new ways to deliver old ones. Oil and gas are not exactly new inventions, but the business of extracting them is as innovative as any. American shale-gas entrepreneurs have used fracking technology so effectively that they have created a domestic gas glut. Some, such as Aubrey McClendon, the founder of Chesapeake Energy, are now in trouble.

The energy entrepreneurs who will do best in 2013 will be those who are adept at reading the geology and forging deals in difficult countries. A likely candidate is Aidan Heavey of Tullow Oil, a nimble oil-exploration firm that has found hydrocarbons in Ghana, Uganda and Kenya. Mr Heavey’s firm is far smaller than the likes of ExxonMobil and Shell, but moves faster.

Overall, 2013 will be a hard year for entrepreneurs. The upside is that hardship sorts the brilliant from the mediocre. During years of plenty, any fool can get funding for his idea to become the world’s leading online provider of Marmite sandwiches. During lean years, only the best can find funding and grow. But the firms they start will last longer, and change the world in surprising ways.

Robert Guest: business editor, The Economist