439 America is in the Middle of a Startup Super Cycle

Thanks for pressing play. This is Christopher Lockhead, Follyer Different. And if you're an entrepreneur, a creator capitalist, a marketer, or anybody in business with a different mind, you're in the right place. On this episode, we're going to talk about how America is in the middle of a startup super cycle, and most of the world doesn't seem to understand what's happening.

and a lot of people here in the United States of America don't either. And it's an incredible insight that is inspiring and points the way to not only the future for our careers and our companies, but the U.S. economy.

And if you like this kind of content, go to CategoryPirates.News today and subscribe to Category Pirates. That's CategoryPirates.News.

Now, as Joey Ramone said, hey-ho, let's go. So right now, the United States is experiencing one of the greatest entrepreneurial explosions in modern history. And that's not just an opinion, that's data. since 2021 americans have filed more than 20 million new business applications that's what the government tells us and i double checked all that with the ais and that seems to be about right in 2024 alone the u.

s averaged roughly 430 000 plus new business applications per month, per month. That's roughly 50% above pre-pandemic levels. 430,000. That's scratching at nearly half a million new businesses a month in the United States of 50% since the pre-COVID days.

It's a stunning number. I couldn't believe it when I saw it and I had to verify it multiple times. Now, there's some other interesting things to know. Small businesses, new businesses generated roughly 70% of the net new jobs.

Venture creation remains a massively above historical names, particularly in the United States. AI startup formation is exploding from two-person startups to, you know, venture-backed companies with a couple hundred people. But AI is on fire and it's inspiring entrepreneurship like nothing else we've seen. Solo entrepreneurs, people with side hustles, they're scaling companies.

And teeny weeny little teams are now producing output that once required entire departments. If we're not at the 10x developer or the 10x marketer, we're damn close. And some people say we're past that. So something really profound here is happening.

And what's really going on, particularly here in the United States, is a new category of economic class of person has emerged called the creator capitalist. This is the person who creates net new value with AI, not just content creators, not traditionally what we thought of as value creators, but people turning expertise into software. people turning knowledge into leverage into judgment creativity into products and services intellectual capital people are taking their ic and turning it into scalable systems and they're creating and deriving economic power from making a difference at scale and here's the stunning part for the first time in history existing knowledge intelligence and execution are becoming close to free you see ai dramatically lowers the costs of all sorts of things, existing knowledge, coding, design, research, media creation, marketing, customer service, lots of kinds of analysis, why you'd ever take data and dump it into a spreadsheet today, I'll never know, and operations, etc.

Which means that one ambitious person with AI can increasingly compete not only with existing companies, forget that, but create whole new categories that change markets and many people with AI today are fundamentally changing how our civilization works. And frankly, yes, are there things to be worried about? Yes, are there things to be concerned about? Yes, do we need radical transparency and governance?

Absolutely. And make no mistake, creator capitalists are changing the future of civilization right now with AI. And nowhere is this happening faster than in the United States, because the U.S.

still possesses the most important entrepreneurial asset on the planet, a culture that honors people who create and build things. America became the dominant economic power because generation after generation of people who grew up here or who came here believed that they could create a different future from Ford to Disney to Hewlett and Packard, Intel, Apple, Microsoft, Amazon, Nvidia, Tesla, OpenAI, Anthropic, and thousands of other companies nobody ever heard of are changing the world right now.

America repeatedly creates environments where entrepreneurs can become the new category kings, and AI is accelerating that flywheel at really a stunning pace. U.S. dominates in venture capital, AI investment, startup funding, unicorn creation, deep capital markets global tech talent and creating of new category defining companies the entire mag 7 are american and the mag 9 10 and 12 as they come public be it spacex be it anthropic or others they're all american companies as a matter of fact the united states has over 600 unicorn companies right now company defined as being worth a billion dollars or more europe roughly has somewhere around 130 to 140 and europe has a larger population let me say that again there are over 600 plus unicorns in the united states and at best 140 throughout europe and they have more people that's not a small difference that's a societal scale gap a civilization level scale gap meanwhile much of the rest of the western world is moving in the opposite direction.

And this is something I worry about a lot. It's sad to watch and it's scary to watch because many other Western countries are opting out of the future, whether they realize it or not. Canada, where I was born, business formation growth has slown dramatically to almost nothing. The UK saw company and corporations decline 10% year over year.

Think about that. company starts be they small start a small side hustles or venture-backed companies are down 10 year over year in the u germany continues to struggle with startup velocity relative to its economic size And France well it improved marginally but for the most part France is not exactly a great place to create new things of value. Mexico has enormous entrepreneurial energy, but lacks the institutional capital and cultural kind of support for entrepreneurs to unleash large-scale growth.

so across many of the countries partnered with the u.s and neighbors with the u.s many of these societies are experiencing something dangerous an actual cultural hostility towards success entrepreneurs are increasingly treated as suspects instead of the people building the future wealth creation in some parts of even the western world right now is being questioned risk-taking, culturally punished, people wanting more and more protections to make things safer. Not only are we trying to nerf the world for kids, we're trying to nerf the world for adults too.

Regulation is expanding while optimism is contracting in major parts of the Western world. And this matters more than most politicians understand because entrepreneurship is not merely economic. It's emotional. It's cultural.

It's civilizational. You see, every new company started is a radical act of optimism in the face of terrible odds. Most new companies fail. Everybody knows that.

And so, you know, I was thinking about this the other day. A friend of mine is having her first baby and it's wonderful. And all of us who know and love this gal are very, very excited for her and her husband. And having a child is a radical act of optimism.

You have to believe this is a world worthy of bringing people into it and that they can have a great life going forward. That is an optimistic point of view when making a child. Well, the same thing's true for making a business. It's a bet on a future and a bet on a different future.

And so culturally, the ability to do that, the belief that you could do that is the most powerful thing in a country, culture. When people build, they believe that upside is possible, that success will be rewarded, that if they make a giant difference that solves a non-obvious problem or an obvious problem in a new, different, non-obvious way, that good things will happen for them, for their company, their family, their community, and maybe even the world. Societies that respect ambition get ambitious people to do things.

The United States is imperfect, but powerful in this regard. And entrepreneurship and somebody being able to improve their station in life is the American dream. And contrary to what people are trying to tell us in the media, it's alive and well, like never before, which is why this moment matters so much. Because you see, AI is not just another technology cycle.

AI is the largest leverage event in modern history. It's the greatest innovation, I would argue, since the wheel. And it's the largest value creation technology ever created by humans for humans. And the countries that embrace it, like the United States is right now, whether it's big time, big, big, big e-entrepreneurs in Silicon Valley, raising billions of dollars, or whether it's the small business person who said, I'm going to go for it with another business or an add on to my business, or whether it's the executive who said, you know what?

I'm tired of being a knowledge worker, a cog in someone else's machine. That world is ending. I want to be a creator capitalist. I want to create new things of value myself with my own bare hands with AI and scale that value.

That's what's happening right now. And the data about new company startups in the United States proves it out. We are at the exact moment in history where becoming a founder, a creator capitalist, a category designer, or a tech entrepreneur or a native AI entrepreneur has never been more achievable. Now, let's be honest about what's really happening across too many other places in Europe.

I mentioned Canada and Mexico because they're the United States' neighbors. and there's something scary going on even in parts of the United States, something that is deeply counterproductive to the legendary that is happening. The people building the future are often being vilified in the media by politicians who want to rail against success. Some entrepreneurs are being painted as exploiters.

People forget the only reason you're successful as an entrepreneur is because you created something of value for others that solved a problem and or created an opportunity for them. When you and I go out to dinner, what we are saying to that restaurant is the amount of money we spent on dinner is worth less to us than the meal and the experience. We would rather give them our money that we had to make. And if you live in the United States, you paid 50% tax on it.

If you're like most of us, I'm going to take my hard earned money and give it to you because I value your restaurant more than I value my money. Well, that's true for Elon Musk and Sarah Blakely. And that's true for the person who opens the radically differentiated cool new pizza parlor in your town. And so value people get wealthy.

People are successful financially only when they create value for others. and in a free market system, they trade that value. That is to say the restaurant is stoked to get the money that you and I spend there because they'd rather have the money than the food and we'd rather have the food and the wonderful experience than the money. That's a free market system.

Both parties in that transaction say thank you. Both parties in that transaction are grateful for the other party. That's capitalism at its most legendary. this is what's being vilified and it's catastrophic at the civilization level it's a giant civilization mistake because here's what the critics refuse to acknowledge creator capitalists don't just create wealth for themselves they create the jobs that employ millions roughly 70 percent of the new jobs created come from new companies they create the technologies and the tools that make other people more powerful.

I'm speaking to you today with an ecosystem of technology that allows me to speak into this microphone and ultimately be broadcast all around the world. That's incredibly powerful. That's technology at work. New technology driven with creator capitalists creates the tax base that funds the schools, the hospitals, the infrastructure, and everything else that society depends on Creator capitalists create the new categories that didn exist and couldn exist until somebody obsessed enough with making a difference with solving a problem with connecting their superpower to making a difference for others decided to build that thing And what's happening in the United States is legendary and the proof is in the data.

Creator capitalists are still largely celebrated in the United States and persecuted, although there are some that are trying to stop that. Some that are trying to say entrepreneurs and creator capitalists are bad. They are bad. GDP growth in the U.

S. continues to outpace every major Western economy. Job creation in the U.S.

remains the envy of the developed world. New company formation in the United States is at historic highs right now as you and I speak. And AI native businesses are creating entirely different categories that are transforming and creating new industries from scratch right now. now if you compare that to the economies where ambition is taxed regulated and morally second guessed the divergence is not subtle it's stark and it's accelerating canada is america's next door neighbor country where i was born that i love and it is turning into an entrepreneurial wasteland and a culture that doesn't want success scares the shit out of me the countries and cultures that understand that entrepreneurship is their compounding advantage are winning.

It is the single greatest source of success for the people of the United States and the country itself. Regions, states, and countries that don't watch and create an environment for their most ambitious people will have them leave for the places that still believe that building is heroic. Building is legendary. And frankly, building different futures is American.

Here's the truth that no policy paper would ever say plainly. You cannot redistribute wealth that hasn't been created. You cannot employ people with companies that were never founded. And you cannot build a future by punishing the people bold enough, audacious enough, ridiculous enough to imagine a different future.

The shift from knowledge worker to creator capitalist is not a threat to society. It's society's greatest opportunity. This is what people are missing about AI. This is what people are missing about creator capitalist.

And this is what people are missing about category designing entrepreneurs. You see, the people who could focus on what they can build, what they can create, what they can do, the new sources of value that can be accessed and things that can change, improve and make materially different with AI at scale. This is where the power is. This is where the value is.

And the people who see that opportunity and go for that opportunity, they're becoming the greatest value creators in human history. Not despite the critics, in spite of them. Now, here's something most people miss. The biggest winners of this moment won't be just the 22-year-olds in hoodies.

There'll be some, but that's not really who it is. The biggest winners right now are the people who spent 20 plus years learning how their category and their career and their technology and their company and their industry works. The executives who knows where all the bad shit is. The operator who's seen every failure.

I was having a conversation with a new CMO yesterday. Incredibly talented executive. a guy that's had massive career in an adjacent field, but has never been a CMO of a company like the one he's now CMO of. And we were having a conversation about his organization and so forth and so on.

And I was telling him some things and he was asking me some things. And then he said, how do you know that? And I said, well, as you can probably tell, what I just told you is a learning that comes from broken bones. and you can only learn that when you break the bones and i'm telling you please take my learning so you don't have to break your bones that's an executive with intellectual capital and experience and judgment the leader who has relationships who has pattern recognition and the hard-won judgment and dare i say it taste that no AI can replicate.

You see, AI is legendary at commoditizing existing knowledge. Well, if you're somebody who can take your knowledge, your experience, and your judgment to create net new knowledge, to create net new learnings, or apply them in powerful ways to people who haven't learned those things, that's where their power is. And no AI can replicate that. And frankly, you might be interested to find out that the average age of a startup founder is mid to late 40s and the average age of an S&P 500 CEO is about mid 50s.

No first timer can fake that judgment, that intellectual capital, and no AI can fake it either. For decades, accumulated intellectual capital was locked inside organizations. You could leverage it, but only inside an existing structure on someone else's timetable built on someone else's vision. AI changes that equation completely because now the barriers that kept experienced executives and operators inside companies, because they needed large teams, they needed expensive infrastructure, they needed technical co-founders and massive capital, those barriers are collapsing because of AI.

What remains is what you have. Your four capitals, your intellectual capital. And, you know, our friend Tom Schwab, the founder of Interview Valet, likes to say, what's average to you is extraordinary to others. And so you might not even feel like you have a lot of differentiated intellectual capital.

And I'm here to tell you, you do. If you've ever created anything that was helpful to anybody, you have intellectual capital. And if in whatever career you're in, if you're one or two steps ahead of other people in that career, you have things to teach. You see, an operator with experience can see things that others cannot.

And if you've been in the game for a while, you have some pattern recognition and you probably have the ability to spot problems worthy of solving. One of the biggest skills going forward is going to be the ability to decide which problems are worthy of our attention. And people with experience, people who are midway through their career are not starting from zero. You starting from a position of an enormous deployable advantage One of the things we teach creator capitalists is to take an inventory of their four capitals intellectual capital relationship capital reputation capital and of course, financial capital.

And when they sit down and actually take inventory, what is my intellectual capital? What are the things that I know that I have created that make a difference for others. What's that intellectual capital? What is my reputation?

What do people say about me when I'm not in the room? What kinds of relationships do I really have? I've had a 40-year career. I'm continuously knocked over when I learn about relationships and the value they are over time.

I meet people that I haven't talked to for 20 years who remember me fondly. That's incredibly powerful. And I have many people in my life that I love deeply. The people I'm closest to in my life that I met through work, relationship capital, reputation capital, intellectual capital.

Those are the things that drive financial capital. And the further you are along in your career, the more of that you have and the wealthier you are, whether you realize it or not. That's why we teach creator capitalists to inventory their four capitals. All right.

You also have something rare, the knowledge of exactly where the value is. You see, most people don't realize technology has never taken one job from one person. What technology does is it moves where the value is. And right now, the value is moving from knowing things and doing things, knowledge and execution, to creating things, to the judgment of things, to applying wisdom to intellectual capital.

The biggest companies in the AI area, they're not going to come from giant corporations. They never do. Where are they going to come from? Two people.

A brother and sister founded Anthropic. one obsessed founder a tiny little team you know at category pirates we're three people and we produce the results of a much bigger outfit or a single creator capitalist with extraordinary leverage and that's ultimately what ai is leverage that's what makes this moment legendary america is not merely creating new startups america is creating a new generation of people who believe they can design different futures for themselves, for their customers, for their communities, for their category, and yes, sometimes even the world.

That belief, as we wrote about in the existing market trap, belief is the most powerful product you can ship. And that belief has always been America's real superpower. And in the age of AI, it's becoming more important than ever so since 2021 the united states of america has gone on a massive explosion of new company and therefore new value creation don't let the people telling you that the economy has gone to shit or that ai is going to take all our jobs or all the other negative garbage.

Don't listen to that. What there is to know is there's never been a greater time to be a creator capitalist, to figure out what your superpower different is and apply that different to making a difference at scale. All right. We would like to thank you.

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