Stephanie Chen at CNN.com has a good story about “accidental” entrepreneurs making the best of the down economy.
As job security from corporate America fades, [many] see the economic downturn as an unexpected chance to transform hobbies or youthful fantasies, once-dubbed impractical, into grown-up careers.
“I’ve spent most of my professional life making money for other people’s companies,” says Laura Waldusky, who opened her own jewelry shop this month in Houston, Texas, after being unable to find a job in 2008. “Why not invest my talents in, well, myself?”
I told Ms. Chen that contrary to what many people think, a down economy can be great timing to launch an entrepreneurial career. It is also a time when small businesses actual have an advantage over their corporate competitors. From her story:
Jeffrey Cornwall, director of the Center for Entrepreneurship at Belmont University in Tennessee, says small business owners must be fiscally conservative and adapt to changing customer demands. Launching a business during an economic crisis can be a good time to steal market share from established yet vulnerable competitors.
One perk to being small: Since small businesses employ less people, enabling the organization to hunker down and reduce expenditures when the economy goes sour, he says.
Jeff – I agree with your perspective. I also think that since everyone is in the same boat now, there are ways to be innovative to save money to weather the storm. For example, startups can trade tiny amounts of equities for services like advertising, lawyers, etc in order to conserve cash. The ad sellers and lawyers are likely to do this because they’re probably going through a slow time as well. There are marketplaces where this bartering can take place (e.g. http://services4stock.com)
I think that if people are willing to think outside the box, they can save their cash and use it for an even rainier day.
Whether Wall Street can have its cake and eat it too remains the big question surrounding whether it will ever again be a force, much less a prominent force in American Finance. Many say it won’t.
One of the avenues that might be examined, however, is the ability to analysts and employees who were sacrificed to the supervisory beneficiaries of their grandiose enlargements to write their own tickets and become independent contractors rather than employees of the salvaged firms.
While, in good times, the underlings Wall Street depended upon to generate those wildly speculative profits (by which Americans now have to replace), the firms are no longer in a position to pay without performance, and that signals a deregulation of the Wall Street employees to call their own salaries, and create their own pay – as has been done in many other industries.
The alternative is offshore low wage labor that do not possess a confidence that many Americans can embrace. It’s one thing to have textiles and shoes manufactured overseas by low wage labor, but quite another to have dividends and stock market returns created there. In that case, Americans would be penniless if all of its manufacturing and its assets were in the hands of foreigners.
There is obviously the compulsion, however, to rethink who won and who lost from this latest round of Executive Compensation superindulgence.