With roughly 600,000 people losing their jobs each month, it is getting difficult to imagine what all those people are going to do. File for unemployment? Search Craig’s list for gigs? Refresh that database of contacts? Massage your LinkedIn profile?
Probably all of these at some point. But increasingly, as Intuit’s “The Future of Small Business” Report (The New Artisan Economy) suggests, whole categories of accidental entrepreneurs are entering the ranks of the self employed. This includes Boomers who un-retire, mompreneurs, and… the recently laid off.
Start a Business in a Recession?
Consider the story of Black Sheep Adventures, which began operations in the wake of the tech crash of 2001-2002. A fragile jobs market combined with scarce capital made for a tough environment, but they have made it 7 years now, and are profitable. To be sure, it is difficult, but there are opportunities out there.
In February 2009, Draper-Fisher-Jurvetson invested $1.1 million in World of Good, an online market place (that runs on an eBay platform) that sells artisanal goods made by artists in developing countries. While the volume may be small, signs of entrepreneurial success are not necessarily about VCs and headline-making investments. Rather, it is about bootstrapping and hard work and making due with very little.
Revenge of the Nomads
Independent entrepreneurs today are the new hunter gatherers, foraging on the margins of a traditional economy defined by single-source employment, job security, benefits, retirement plans, etc. There is nothing wrong with these things, they just happen to be really scarce right now!
Like nomadic hunter-gatherers of old, this new breed of independent business owner recognizes that being successful in small business requires a symbiotic relationship with other institutions—companies, banks, non-profits, government, partnerships with other independents, etc. This is the new ecology of trust, transparency, reputation, and authenticity, all qualities sadly lacking in many large firms.
Historically, there has often been an ebb and flow between the success of large organizations (Empires) and nomads surviving on the margins in symbiosis. Occasionally, the relative power of nomads increases dramatically. Recall the Mongols, who for countless generations were referred to by Imperial China simply as the ’savage hordes to the north’… Thus the Great Wall.
At some point in the early 14th century the Mongols made it around the Wall and sacked the Chinese government on their way to building the largest (by land mass controlled) empire in human history. They controlled from Beijing to what is now eastern Austria!
I’m not saying that today’s entrepreneurs are on the verge of a revolution; however, they are filling a niche and providing jobs, gigs, and money in an environment when the corporate empires are reeling. Nomads are not totally independent, they never have been; but they serve a useful, even necessary, function, in the allocation of resources and the maintenance of social continuity and stability.
So, while this too will change eventually, for the time being look to small businesses and would-be entrepreneurs as part of the solution to the current economic crisis. Heck, you might even have a go yourself!