Entrepreneurs Rise to Challenges
By Emily Touch
Fear and panic are dictating many of the decisions made during these days of the coronavirus. Those feelings of dread are justifiably centered around the concern that you or your loved ones may contact this pathogen and become ill. This double black swan occurrence impacting our public health and economy is causing according to LA Times, skyrocketing levels of anxiety for many in the United States. Even after taking all the steps needed to protect oneself from the virus such as social distancing and washing one’s hands, there are elements out of our control regarding the probability of getting infected.
A possible way to alleviate some of that anxiety, particularly regarding monetary matters, and as a hedge against more layoffs and a further downturn, is taking charge of your financial destiny. It may seem counterintuitive, but the present might not only be a good time to start a business, it may be a necessity given where we may be headed. Never in history has it been easier to plug in a computer, make a call, reach out, write a business plan, and begin executing right now on building a business. Previous limitations such as access to capital, talent, and infrastructure no longer exist. It’s true that it may be more difficult to start that business you’ve been thinking about now than it was six months ago, but without a possible source of income in the near to medium term, or a reduction of your salary, you may have no choice. Starting a business is not an exercise in improving your mental health, but any action is better in empowering you with the feeling you’re moving things forward.
What kind of business
A caveat here; while there are opportunities during this crisis in high-growth areas such as remote working/communications, digital health, and SaaS products many of them will require being backed by angel investors and venture capitalists. If you have an idea in those or related fields and can put together an MVP, (a minimum viable product) and can additionally spend a few months without a salary while you look for capital, then go for it. Otherwise, the possible business ideas we are focusing on look to generate cash from day one.
While there is a lot of “common knowledge” in the entrepreneur space of not “scratching your own itch” as covered in this Harvard Business Review article, many of us don’t have the luxury today to go out and acquire new skills. If you possess such abilities as writing copy or understanding sales it is better to start with what you have, even if that means putting a profile up on a site like Fiverr to start pitching possible clients immediately in the effort to build a business.
In a future article we’ll further cover some business concepts, but some ideas could include launching an e-commerce brand using marketplaces such as Amazon or platforms such as Shopify, personal coaching, or other professional consulting services. Given the quarantine times we are currently experiencing, even services such as digital marketing for brands who need online exposure and tutoring kids stuck at home on Zoom could be a start. If you’re reading this article you most likely have an idea or two regarding the type of business you’d like to build; the common denominator is that all these businesses have close to zero overhead to start.
Control your destiny
We’ll start with the most important and existential reason to start a business (including a side hustle) during this period, and that’s to put food on the table. If you look back only a few generations ago, before the United States’ economic landscape was filled with corporations, many workers made a living owning a store, trading, or even running a farm. They had no choice because there was no one to whom they could submit a resume. It wasn’t called being an ‘entrepreneur’ back then, but simply, ‘making a living’. They were the original entrepreneurs, and this was the way of life for generations stretching back thousands of years. To understand how much being entrepreneurial is in our DNA, the History of Entrepreneurship mentions that “the first known trading between humans took place in New Guinea around 17,000 BCE, where locals would exchange obsidian for other needed goods – like tools, skins, and food.”
Many budding entrepreneurs believe starting their own business will free them from a schedule, answering to a boss, or not having to deal with other people’s problems. This, however, is as far from reality as you can get. There will always be difficulties, often more so, when you start your own business. The difference is that you are executing against what your wishes are, building something of your own which you have equity in, and which could generate for you the biggest financial returns. For some lifelong entrepreneurs building businesses is their destiny.
Seeing opportunity in the bad
AsBaron Rothchild stated when taking advantage of bad times, “buy when there is blood in the streets”. There are always opportunities in economic downturns. Talent and eager money will flow to those who take the lead in creating new opportunities for wealth creation. Some of the world’s most iconic brands, as well as half of Fortune 500s were started during difficult economic periods including Disney, IBM, and Microsoft. Many of these companies’ founders didn’t have the luxury of analyzing a market report of when the ideal time was to open shop, they just needed to make money.
Mark Twain’s famous contrarian view that, “whenever you find yourself on the side of the majority, it is time to pause and reflect” may apply to today’s current events as whole industries are being upended while new ones are being created. It’s not just the news stories about the travel industry being decimated and Zoom doing extremely well; it’s about savvy entrepreneurs who see around corners and will come up with new products we don’t even know we need yet, such as in the emerging social distancing economy.
Focus on creating a real business
During boom times when money is flowing many ideas that aren’t fully formed often receive funding. People buy non-essential items without a second thought and consumption is rampant as there is a perception that good times will continue indefinitely. Additionally, people who may have started businesses for the wrong reasons such as maintaining an ‘entrepreneur lifestyle’ (on social media) enter the fray. With the downturn many of these people will be out on the street if their company does not offer a real solution to consumers.
Times like this focus the mind and make entrepreneurs think about what product or service is essential, as well as the most cost-effective way for them to get it out there. What product solves people’s problems right now? This is a much more solid foundation when starting a business by knowing it was created to satisfy real market needs, with limited resources, and under difficult conditions. When the economy does improve, (and things will get better) you will have built a business with a strong foundation. Business guru Peter Drucker stated this in the clearest terms: “business, that's easily defined - it's other people's money.”
Where the rubber hits the road
This could be a trial by fire if you choose to build a business today whether by choice or necessity. Many possible competitors may lose their heads, while others will be skittish when they need to be aggressive. Entrepreneurship, and striking out on your own shows a lot of courage and character, both of which are in short supply these days.
Given the risk-averse effects of human nature, many people won’t pull the trigger on starting a business even when they have nothing to lose. While it can seem overwhelming to start, small steps every day and tenacious focus day in, day out, lead to success. It all starts with taking that first step. We don’t suggest starting a business in order to test yourself, or as some personal development experiment. Rather, you should start a business to solve a problem and create value. Making money and getting paid are the by-products of creating value for customers. However, you will learn a lot about yourself, business, and the world around you when embarking on an entrepreneurial journey.
We will look back on these days and remember where we were during the Pandemic of 2020. We will remember our actions, and the time will pass by either way while we sit in quarantine. The choice is either sitting at home anxious and full of despair as our bank accounts deplete or taking the initiative to build something. History may or may not judge you for not acting (you may have the next Facebook within you), but you may look back in regret knowing that you didn’t even try. This does not need to be a highly emotional decision, but if there was ever a time to find a new way to make a living, it is now.