Don’t Let the Economy Stop You from Starting

If you feel the tug to start a business, why wouldn’t you just go do it?  Well, it seems, starting a company is one of those things that people, unfortunately, often talk themselves out of.  So if you are looking for an excuse to ignore the tug, let's consider this one: “The economy just isn’t strong enough, currently; it’s too risky to start a company right now.”  We can even use last week’s job report to validate this excuse; the report said, "the economy could slow in the summer months".

Well, turns out that’s actually a terrible excuse.  To the contrary, companies founded in a weak economy have at least as good a chance of long term survival as those founded during good times.  It is interesting to note that one study found that more than half of the 500 largest companies in the U.S. were started during a recession.

Some aspects of a weak economy can actually help a startup--for example, those in your network that are unemployed will be more likely to take a chance helping you build a company, as they may have few other options.  Office space is more likely to be available at an affordable price.  Meanwhile, potential customers may be short on cash themselves, and be more likely to take a chance on a new company.

Moreover, the same study mentioned above, finds there are reasons to believe that a business started during a downturn might actually benefit in the long term.  It is as if such businesses get an inoculation against recessions.  Businesses that start in the midst of a strong economy are the ones blowing millions on Super Bowl ads, while those started during lean and mean times stay lean and mean.   

Speaking of “lean”, the other reason to get started despite a weak economy is the learning that has happened during the recent recession; specifically about The Lean Startup as espoused by Eric Ries.  As reported by the Harvard Business Review, the lean startup methodology changes everything.  As it relates to a weak economy, the key point is, using this approach, a smaller amount of capital is invested and put at risk early on in a startup’s life.

Here in 2013, we are far from the dark days of 2007, when things looked bleak indeed; but we are also not in the heady days of the late nineties—so the ironic good news is that the economy is still bad enough to help you get a good start.   So get going, and remember this Seth Godin quote:  “The only thing worse than starting something and failing… is not starting something”.