The Venture Edge

Ready for some good news on the entrepreneurship front? According to a report released last Thursday by the Kauffman Foundation and Young Invincibles, 54 percent of Americans aged 18 to 34 -- the generation commonly known as the millennials -- want to start their own businesses. Okay, there's just one thing. Of this 54 percent, only 8 percent of them own businesses now, and only 11 percent intend to start businesses within the next year. And what about those other 38 percent -- the potential young entrepreneurs who want to start their own businesses but who don't plan to do so anytime soon? Why have they delayed their dreams of entrepreneurship? 

According to a Wells Fargo/Gallup poll published today, more than one in three -- 36% -- of U.S. small business owners reported that they are moderately or very worried that they will go out of business in 2012. Not only that, but 32% reported that they are moderately or very worried that they will be unable to pay their employees in 2012. When asked what they think is the most important problem facing small business owners like them, the top-three responses were: Complying with government regulations (22%), consumer confidence (15%), and lack of consumer demand (12%).  

Those of us who blog have our favorites that we follow, but that doesn't mean that we always agree with what they have to say.  Such is the case with one of my favorite blogs, Steve Blank, who is a VC, author, and adjunct professor at Stanford.  The day before Thanksgiving he posted "When It's Darkest Men See the Stars."  This was meant as a there-is-still-a-lot-to-be-grateful-for-despite-everything-that's-wrong-in-the-world type of post appropriate for Thanksgiving when we're supposed to give thanks for everything we have.  And it was actually a very positive post, claiming that "we're standing at the beginning of the entrepreneurial revolution." I'm sorry, Steve, but the entrepreneurial revolution has been going on since the 1980s when it became the word du jour in the U.S.

As I have already mentioned here more times than I can keep track of, we're still in the throes of nasty economic downturn -- certainly the worst we've seen in many, many years. And despite everyone's hope for a rosier future, the near-term picture is still pretty bleak. According to government statistics, private payrolls rose by only 33,000 in May and 83,000 in June – not enough to sustain a recovery, and average wages and hours worked have both declined slightly. On top of all that, credit is still tight -- especially for small businesses. 

This morning's LA Times (paper edition)  led with an article, "Economic Fears Rise as Stimulus Ebbs."  Here we go again.  Articles like these underscore the fact that no one seems to understand the economics of growth and job creation. One business owner is quoted in the article as saying that his biggest job this year was a stimulus project repairing a pipe at the Veterans Administration building.  "My company's on the verge of closing," he said. About $18 billion of California's stimulus funds has been spent on Medicaid, unemployment insurance, food stamps, schools, and job centers.  I'm sorry, where is the job creation?  Can you imagine what a bunch of entrepreneurs could have done with that $18 billion?

It looks like President Barack Obama will announce in his upcoming State of the Union address tonight that he made some mistakes during his first year in office. It is anticipated that among these mistakes will be the admission that not enough focus has been placed on getting the economy back on track. I suspect this new focus on the economy will be officially rolled out tonight. Because small businesses are considered to be a key engine of economic growth in this country (as well as the source of our greatest technological innovations), expect to see an emphasis tonight on programs that will reinvigorate small business. This could potentially be accomplished through a variety of means, including tax breaks, unemployment tax holidays, incentives for hiring new employees, improved access to capital, and much more. So, if you've got a small business here in the United States, tonight just might be your night.

In my previous post just before the New Year, I talked about the fact that we should strap ourselves in for some interesting times and that it's better to be proactive about change rather than reactive.  In the 2008 election, about 52% of the country voted for change.  They were expecting change, and change is what they got (one could argue whether it was the change they wanted, but I digress).  The point is that it's an established fact that our minds tend to give us what we expect. if not always in the exact form we want.

As a business writer AND an entrepreneur, I love to read the latest statistics on business and economic trends. As such, one of my favorite online hangouts is Discover Small Business Watch. Each month the Discover number crunchers do a survey of small business owners, and the results are often quite illuminating.

Peter's post on signs of a turnaround was certainly welcome to most of us, but those of us who decided not to participate in the recession in the first place did not wait for recovery signs before starting or growing our businesses. Nevertheless, it seems we may not be in the majority .  Today during an interview, a reporter told me that my view of California's competitiveness going forward and the ability of entrepreneurs to be successful in a down economy was quite contrarian compared to some of the entrepreneurs he had interviewed.