Archive for April, 2009

No, I’m not referring to the great bell of the clock at the northeastern end of the Palace of Westminster in London. Not even Pittsburgh’s Big Ben Roethlisberger, nor J-Lo’s ex, Big Ben Affleck. I’m talking about Federal Reserve Chairman, Big Ben Bernanke.

Mike and I were scheduled to appear on Fox’s Business Week this afternoon to discuss the unemployment numbers from last month and how TheCanned.com can help the many newly canned workers. Unfortunately, Big Ben Bernanke was asked to appear in our place.

Though you won’t be able to see us on TV today, we will persevere. Our efforts to promote TheCanned.com have only been strengthened by Big Ben Bernanke’s media-hungry selfishness.

You’ve won the battle, Big Ben, but TheCanned.com will inevitably win the war against unemployment.

What do GE, Microsoft, Cisco, HP, FedEx, and IHOP all have in common? They were all started during recessions. More than half of the companies on the Dow Jones Industrial Average were started during recessions, in fact.

Last week the founder of WePay.com, Bill Clerico, wrote about the dedication that it takes to start a company. Recession be damned, he and cofounder Richie Aberman are determined to start the next revolution in online banking. Finding investors has been a challenge for WePay, to be sure. But after months of shoestring budgets they’re on the verge of making it happen.

Recessions provide an ideal climate for entrepreneurship. In a lot of ways, this recession is especially ideal. Think about it:

Venture capital is still in play

Typically, investors lose their appetites when the markets plummet like they have since last summer. This remains the case. However, a confluence of credit crunch and low energy prices has sucked a lot of private equity money out of asset-backed securities and alternative energy investments. The net effect is that although investors are wary, there is still VC money out there for projects with solid fundamentals. And even if it wasn’t: VC really only funds a fraction of start-ups. Friends, family, angel investors, and personal debt constitute the lion’s share of start-up capital.

Competition is weak

Corporations usually have an edge over start-ups when it comes to raising funds to expand. Again, the credit crunch has leveled the playing field. Very few companies are expanding. In fact, most are struggling to keep the lights on. A lean start-up with a fresh operating plan is perfectly positioned to cater to price-sensitive consumers. Demand for goods and services falls with the economy, but it rarely disappears. If you can improve something or make it cheaply, a recession is an ideal time to steal some market share.

Talent is cheap

With unemployment on the rise and wages poised to fall, you won’t have as hard a time recruiting a talented team. People tend to focus on the idea portion of starting a company. What turns an idea into a company, however, is the amount of push that you put behind it. Having the right people in place is crucial to making that push.

None of this is to say that starting a company is easy; it’s not easy in any climate. Sure, if you time a bubble just right you may be able to sell a half-cocked company to speculators for a quick profit. But building something enduring takes time in any market. At least in this one, external conditions seem to slant in your favor.

The job markets aren’t the only place this downturn has heated up competition. Yesterday in New York’s East Village, a group of unemployed workers gathered for the first annual Unemployment Olympics. They smashed fax machines like Michael Bolton in Office Space. They tossed phones like javelins, ran around, and played pin-the-tail-on-the-boss.

The purpose? Sure as Ponce De Leon searched for that elusive fountain of youth, these laid-off New Yorkers searched for the lighter side of unemployment. Whether or not they found it, no shortage of local businesses lined up for sponsorships.

Promotional campaigns tied to the recession are all over the place. This isn’t surprising: the unemployed population in the United States is a fairly representative slice. These are people across the nation, from all industries and backgrounds, of all ages and genders. If this isn’t evidence that the stigma attached to joblessness has disappeared, I don’t know what is.

Across the country, businesses are offering recession specials. If you bring your pink slip to The Delancey on the Lower East Side (NY), they’ll give you a free tequila shot. Jos. A. Bank will allow you to return your suit if you get fired after buying it.  Hyundai will even let you return a car. Gray’s Papaya has been peddling recession specials since the boom times (although ironically, they just raised the price).

And if the specials aren’t explicitly stated, don’t be surprised if retailers are still willing to knock a few bucks off the purchase price of just about anything. I called ATT to inquire about a suspiciously high cell phone bill last week and they knocked $150 off and credited me 500 rollover minutes without missing a step (or being asked). Just like many are nervous about losing jobs and paychecks, businesses are worried about losing customers. If we can all avoid losing our minds, there might be a win-win here.

You may not have a job, or a dependable income, but smile: you’re officially a target demographic. Have some fun with it.  Judging by the press coverage, the Unemployment Olympians certainly did.