I’ve been thinking a lot about entrepreneurship recently–its inherent financial risks, the unique “type A” drive required for it, the amount of time and commitment involved. I’ve also been trying to figure out why the heck anyone would be idiotic enough to try his hand at entrepreneurship in these trying economic times.
I just read an article in The New York Times about the increasing number of twentysomethings who decided to create their own jobs rather than endure the grueling process of searching for a job as the country climbs out of the recession. I can’t believe what these young people, some my age or scarcely older, have accomplished. Twenty-six-year-old Lauren Berger founded Intern Queen, an internship database for motivated young people looking for experience–people not unlike herself. Josh Weinstein, 24, got a PayPal founder to back his social-networking site CollegeOnly. Two 22-year-olds started an online magazine for college women called HerCampus. They’re my age–and they’re turning a profit!
These are a few success stories among, as you might guess, many stories of failure. It’s always difficult and risky to start a business, especially when you’re young and broke. But right now, it’s even more difficult. So are these kids crazy…or are they onto something?
I’m a highly logical person and haven’t been known to take huge risks, but I’m starting to believe in recession-era entrepreneurship. It’s not just happening among young people; the number of startups founded in the last couple of years is much larger than the number of startups founded before the recession began–and there’s an explanation for the madness.
Say you’ve been working at a big company in Silicon Valley for a number of years. You’re happy for now, but you have vague thoughts of taking that idea you’ve been mulling in the back of your mind and making it into something on your own in the far-off future. Then, suddenly, your company’s earnings are way down and you’re laid off out of necessity. What now? All the other tech companies are doing the same thing, so finding another job with equal pay and benefits might not be a possibility. Suddenly, that vague idea you’d been mulling is at the forefront of your mind. You’ve got intelligent colleagues, also recently laid off, all around you. You’ve got some money. You don’t need a whole lot of office space, so rent won’t be too high–and neither will the cost of marketing, thanks to social networking and the access you have to big tech companies’ clouds.
Suddenly, you’ve got yourself a startup.
It’s called accidental entrepreneurship, or necessity entrepreneurship–when people take the gigantic step to become their own boss after they’ve exhausted all other options. With lots of spare time to think–you can only spend so many hours scouring Craigslist, Monster and CareerBuilder, something I know all too well–the unemployed start to get creative, and big ideas often start to blossom into little companies.
As it turns out, founding startups in recessions isn’t unheard of–in fact it’s common. The Kauffman Foundation found last year that more than half the companies on 2009’s Fortune 500 list were founded during a recession or a downward market trend. Among the recession-born companies: Starbucks, Intuit, PetSmart.
How do we re-energize the economy? Maybe the startups that come from the big ideas people get during unemployment are the answer to that question. Maybe it’s startups that propel us up and out of economic woe.
If that’s the case, could the creative news ventures people are building now be the saving grace we need to get us out of this “newspapers are dying” funk? Interesting, promising things are happening in journalism despite continued financial hardship at traditional news organizations. One of my favorite ideas is Spot.us, where people can bid on investigative story pitches from journalists all over the country and can later read the stories that get enough financial backing. Voice of San Diego, a small news organization of former editors and investigative reporters founded in 2005, resulted from a frustration its founders felt in the San Diego Union-Tribune’s lack of hard-hitting local news coverage. In the last few years, it has been lauded for its excellent investigative reporting and original financial model.
Journalism, like this state’s government, needs to make some drastic changes, financially and logistically, if it wants to stay afloat. Let’s hope these creative new ventures, many started post-layoff, point journalism (and the economy!) in the right direction.