This article raises an interesting point. However, I would argue that the startup costs have fallen across the board, whether you're a software startup or a startup in another field. First, it's much less expensive today for startups to obtain key services due to the prevalence and availability of offshoring. Second, new technology enables many startups to handle some services in-house, whereas before it required hiring an expensive service provider (e.g., Google AdWords). Third, there is a shift in mentality towards a leaner, smarter mode of starting up. Founders no longer feel the need to obtain overhead that (a) requires substantial investment and (b) creates little direct value for customers. If I remember correctly, a story from the dot com bust was when eToys used some of its funding to BUY a high-rise office building in Los Angeles.