In 2014, a record number of new companies were formed in the UK, according to the national campaign group Start Up Britain.
‘Record numbers’ of anything results in two different media reactions — the “Wow, isn’t it amazing, aren’t we doing well” and the “Oh no, that’s far too many, what are we going to do about it”.
An additional 580,000 companies registering within one year might, to some, seem like an achievement. To others, like me, it seems like a growing bubble that will some day burst.
A bubble full of hope
This ‘record number of companies’ startup bubble isn’t just a trend or fad that, once burst, will be gone and forgotten about. It’s a bubble that is full of the hopes, aspirations, livelihoods and mental sanity of hundreds of thousands of individuals, their families and their friends.
When you look into Companies House registrations in more detail, you’ll find that, on average, two out of three companies are ‘dissolved’ within two years of their registration. That’s like filling a bowl with water and washing up liquid, watching all the lovely bubbles form, and then pouring salt all over it and watching most of the bubbles disappear.
Some of the bubbles are tiny, pop gently and disappear quietly. Some are bigger, pop more violently, and take other bubbles out with them. Others are full of shine and iridescence from the chemicals in the washing up liquid so are much more noticeable for a very short time, then pop nonetheless.
Adding more washing up liquid and stirring the water a bit will always add more bubbles — but just how long will they last?