It is much easier to start a web startup in 2011 than it was in 1995, or even 2005.
You don’t need upfront capital to buy racks of machines, miles of CAT-5, routers and load balancers, redundant power and backbone connectivity — all are available on-demand from Amazon for pennies an hour.
You don’t need to write server-side Web frameworks — you have your pick in nearly any language. In fact, you have your pick for any number of services you might once have had to develop or maintain yourself: email delivery, web analytics, A/B testing, server monitoring, file hosting.
Because the infrastructure cost of starting a startup has gone down, the amount of money you need from investors to get your company off the ground has also decreased. You can build a prototype in a few months (as every YC class demonstrates, twice a year) for less than $20,000.
And there are more people to give you that money — VCs, ex-Googlers and Facebookers, other angels, startup accelerators and incubators.
But ask any startup around what they really do need right now, and the answer is clear — great technical talent. Startups of all sizes are competing for a small pool of highly skilled candidates, and in startup hubs like San Francisco and New York the competition for engineers is fierce. This scarcity has persisted despite consistently high national unemployment rates.
And because it has become so easy and cheap to start a startup, convincing great engineers to join an existing startup has gotten much harder.
All of these trends will continue — infrastructure costs will continue to decrease, tools for creating web products will get more sophisticated, and more people (and more kinds of people) will be investing in startups at all stages.
But those startups who can hire and retain great talent will achieve greater success because they have the capacity to out-execute their peers.