I had a meeting today where we talked about the economy and the environment for entrepreneurs, and while the uncertainty in the economy is certainly not helping, the outlook is not all bad. During the last two recessions in the early 90s and the early part of this century, new businesses sprang up in a variety of industries. Sometimes necessity drives these ventures, such as when people start a new company after being laid off. The times now are no different in the sense that many new entrepreneurs are looking to replace a job they used to have. But what is different this time is that many entrepreneurs do not have access to capital in the way they did in previous downturns. The current uncertainty in the market is forcing many banks, investors, and other sources of capital to hold back. That certainly hampers growth in industries that require large investments in inventory, real estate, or equipment, but innovation and entrepreneurship continue to find ways to thrive.
The timely article in the Wall Street Journal today about "Startups on a Shoestring" was a good reminder of the power of using creativity to overcome these kinds of obstacles to starting a business. As I was reading it, I noted two important take-aways for entrepreneurs looking to launch a new venture. First, that successful businesses can be started with such small amounts of capital. I have worked with clients who started the same way: they took an idea and nurtured it through bootstrapping and hard work. Second, the article
First, this is a good reminder that starting a company does not always require a large, upfront investment of money. There are many businesses that have started and thrived on much less. I have noted before that there is nothing like bootstrapping to focus a founder on what is really critical for the development of the business, and to maintain your flexibility and control for the future.
Second, it is important to note that new businesses can come from anywhere. Traditionally, there has been a lot of attention paid to technology-driven startups in the high tech, clean energy, and biotech spheres. And certainly, almost all businesses today will have a Web presence of some kind; that is just a fact of life in today's economy. But it is good to remember that a company does not need to be revolutionary to get noticed, and that "low tech" ideas like bracelets, tours, and flooring services can still turn into successful businesses.
The bottom line is that entrepreneurship and innovation can find a way to thrive is just about any economy. While the barriers to entry may be more difficult for some industries, these stories prove that there are still ways to start a business with just an idea and some hard work.