During a slump
A contrarian’s perspective on how entrepreneurial opportunities
and innovation can thrive during an economic crisis.
This installment of Economic and Business Dimensions is written by Tim Draper, the founder of Draper Fisher Jurvetson
(DFJ). Located in Silicon Valley, DFJ has
funded over 500 firms since its founding in 1985, including Hotmail, Baidu,
Skype, and many others. Draper is known
for first successful use of “viral marketing” while funding Hotmail and travels
the world giving speeches about entrepreneurship, from which this column is
derived. Draper revels in being a contrarian about entrepreneurial opportunities
during the current economic slump.
Viewpoints section board member
NoW is tHe time for the true ntrepreneur to shine. As economies worldwide col- lapse and firms retrench, peoplelookforalternatives:
cheaper alternatives, faster alternatives, easier alternatives, and smaller
alternatives to what they are using now.
To some observers this is a crisis. To an
entrepreneur this is an opportunity.
Let me say it to all the entrepreneurs: If you are not taking advantage
of this economic crisis, you are missing one of the greatest opportunities
of your life. Where do you want to be
in the near future?
Those of you who have lost your jobs
have had the decision made for you.
With no other alternative, and companies not hiring, you are forced to become an entrepreneur of one sort or another. At the very least you must reinvent
yourself, perhaps go back to school, and
emerge with a new mission in hand.
Those of you who still have your
jobs, now is the time to rock the boat.
When things are going smoothly, nobody wants to rock the boat. Now is
your time. You should make sure you
are breaking old systems, inventing
fresh concepts, and seeking out new
customers for your existing business.
Use a crisis like this to change those
things in the organization you always
wanted to change.
A Big crisis should not Go To Waste
Consider this list of companies: GE,
IBM, Microsoft, Shell Oil, AT&T, Mer-ck, Johnson & Johnson, Sun Microsystems, Skype, Kodak, Polaroid, HP, and
Adobe. What do they all have in common? They all were started during an
economic downturn, some during the
Why do recessions give birth to
some of the greatest, longest lasting,
and best-run companies of the world?
There are a number of reasons. First,
many managers think more creatively
if circumstances push them into it.
That is what happens as the economy approaches the nadir of the cycle
(they also think creatively at the zenith, but that is a different story). In
downturns managers will question
old assumptions. The old ways don’t
work anymore. No concept is too crazy. They explore with new directions.
Anything is possible. That leads to
bigger bang for the buck. It leads to