To most people, this may not seem like a great time to start a new company, but that’s exactly why it is.
If you follow conventional wisdom, then this is likely the worst time to start a new business. People are more conservative in their spending amid the pandemic, hiring is much harder when you can’t interview candidates in person, and trying to build a team remotely is incredibly challenging. And good luck getting a bank to return your calls for a loan or securing early-stage venture funding, which has slowed significantly.
However, there are a few cases of entrepreneurs who started businesses during a severe economic downturn. As odd as it may sound, there are significant advantages to starting a business right now. Some are pretty straightforward and easy to see, once they’re pointed out. Others are much more subtle.
To be clear, we are not saying that it will be easy. But if you were already in startup mode, or if you’re debating going into startup mode because of the current economic climate, we’d ask you to stop and think about the following.
The Talent Glut
First, the greatest single challenge in starting a new business is attracting talent, especially senior-level people whom you can bring on board as partners. When things are going well, these folks are nearly impossible for a startup to attract unless it’s very well funded. Many of those same people are now wondering what their next gig is going to be.
For the foreseeable future, we are likely to experience a glut of talent. If you’ve got a killer idea, this is a great time to attract and collaborate with top-quality players. The same goes for the sort of talent you need to help with the many operational pieces of starting a new business, such as setting up your website, creating your branding, or support and administration.
By the way, if you’re thinking that this is a great way to save money, you’re right, but you’re also missing the bigger and more important point. What’s nonintuitive is that anyone you bring on board now will end up being a much more dedicated, faithful, and committed team member, because you not only gave them a lifeline, but you also bonded with them and together succeeded during a time of crisis and overcame the odds.
Open for Change
Second, something magical happens during an economic or social crisis that can be incredibly supportive of a new venture. The heart and soul of entrepreneurship is experimentation. Yet markets are often less than receptive when it comes to change.
However, in times of crisis, there is an expectation that we are looking for change–we accept that we’re all building a new normal and part of that will be finding new ways to live, work, and play. I’ve found that you can make egregious mistakes and suffer far less if any, market setback as a result.
Yank the Safety Net
Third, you are now operating without a safety net. But, wait, that doesn’t sound like a good thing, right? Shouldn’t you have more reason to be scared of that scenario? Yes, you should, and that’s a good thing, for you.
Look, you’re an entrepreneur, and that means that you aren’t likely taking the easy road to anywhere. You rise to meet challenges head-on; while others may look for the safe path to mediocrity, you’re looking for the tough path to excellence. Taking away the safety net from anyone else would paralyze them. For you, it just heightens your focus and commitment.
Nobody wakes up in the morning and says to the universe, “Hey, throw uncertainty, economic turmoil, and social distress at me, and while you’re at it yank the safety net.” But when the universe decides that’s what it’s going to throw your way, maybe your response should be, “Thanks, that’s just what I need!”