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In fact, during the recent economic slump, more Americans have started businesses than at any time in the past 15 years, according to the Kauffman Foundation. The Kauffman Index of Entrepreneurial Activity, an indicator of new business creation in the U.S.,shows that .34 percent of American adults created a business per month (or 565,000 new businesses) in 2010. That's not entirely surprising given the state of the economy: Entrepreneurship is often a choice for people who were laid off and can't find work.
And, like Arment, a good portion of these new business owners are choosing to go it alone, creating sole proprietorships rather than rushing to hire employees. Using Bureau of Labor Statistics data, the Kauffman Foundation calculated that the quarterly rate at which new business establishments that hire employees opened doors dropped from .13 percent in 2007 to .10 percent in 2010. The recession saw an increase in the number of new businesses started, but a decrease in the number of those that hire employees. "The data show a rise of sole proprietorships," says Kedrosky. "But the data also show that the cost of running a small business has never been lower so more can operate profitably without taking investment or without hiring employees."
Just ask Maciej Ceglowski, 36, founder of the website Pinboard, a paid social-bookmarking service that lets subscribers archive web links with annotations and share them with friends. ("If Instapaper is the beautiful reading room, I'm the dusty attic," he says.)
Ceglowski started Pinboard in response to the demise of Delicious, a social website that preceded both Facebook and Twitter. Yahoo bought Delicious in 2005 and removed many of the features users liked. "I thought it was becoming less useful," says Ceglowski, who worked at Yahoo in 2007 on a different venture. But instead of complaining, Ceglowski got to work. He started Pinboard in July 2009, working in his spare time. On December 16, 2010, Yahoo had an all-staff meeting where it listed Delicious on a slide in the "sunset" category meaning the site would probably die a slow death. (Eventually, Delicious was sold off to the founders of YouTube.) When the slide was leaked on Twitter, Delicious fans began to search for a substitute and Ceglowski's Pinboard was there waiting. A few mentions in the tech press helped Pinboard take off. Thousands of new paying customers came on board that first day. In three days he had amassed $100,000 in revenue.
Today, Pinboard is Ceglowski's fulltime job, pulling in $250,000 in revenue over the past two years. He says the site has 25,000 registered users with about 18,000 active ones each month. Ceglowski's only costs are paying for server space, and Pinboard makes money by charging customers a one-time fee of $9.50. (The fee started at $2 and goes up a penny with every 400 people who sign up.) There's also a $25 a year archiving fee for people who want personal copies of links. "My dream is to keep this a one-person project," says Ceglowski. "I am competing against billionaires like the YouTube guys running Delicious and I can hold my own. The tools I use have gotten so good and they are the same ones that Yahoo and Google use."
Still, there are downsides to striking out on your own. Landlords don't like self-employed businesspeople and getting a mortgage or a small business loan can be tough. Plus, being a solo practitioner is time consuming. "Sometimes months go by and all I did was work," he says.