The Venture Edge

With only a few weeks until a very important mid-term election, Peter and I decided to focus our next several posts on critical political and regulatory issues impacting entrepreneurs and small businesses for the foreseeable future. We’re not going to take political sides but rather deal with the truth—just the facts, folks. Let me start by saying that uncertainty is clearly the word of the day and the entrepreneurs and business owners I talk to around the country are all singing the same tune—no major commitments until we know where things are going. 

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.

Friday night I was having dinner at a wonderful restaurant in downtown Los Angeles.  It's called Provecho , a modern, upscale Mexican experience, and it was started by a former graduate student of mine and her chef husband.  Now you would think that downtown Los Angeles would be hopping on a Friday night, but no.  You could find more people at upscale restaurants in Sioux Falls, South Dakota on any night of the week than you'll find at the terrific restaurants in downtown Los Angeles. 

It seems like every day there is some new bit of news about the economy and its chances for recovery. One day the news is good -- consumer confidence is up, for example -- and the next day the news is bad. However, some economists feel that we are just about to turn a corner and that, although the recovery will take some time, the trend is definitely about to head in the right direction.

If your sales are declining, it may just be time to give your customers a break.  At least that's what Dana Mattioli contends in her Wall Street Journal artice today. More and more small businesses are figuring out ways to entice customers to buy even in a down economy.

A while back I posted about the fact that many of today's top companies were started -- or significantly grown -- during some very difficult economic times.For example, Disney started during the post-war recession of 1923-24, Hewlett-Packard began during the Great Depression, and Microsoft was founded during the oil crisis in the mid-1970s. The point? That just because times are tough doesn't mean that you as a businessperson should run and hide from the multitude of opportunities that await you. A recent article in the New Yorker provides further support to this point of view.

Make no mistake about it -- the current economic downdraft is having serious consequences across our nation -- and around the globe -- and there is no end yet in sight. However, it's at times like these -- when everyone seems to be placing their bets on a continued downward slide -- that great companies are built, and that sigificance is found. This fact has been borne out time and time again by many of today’s greatest companies, which either began or grew substantially during recessions and/or depressions.

Yesterday my blog-mate Kathy Allen and I were chatting about the current state of the economy, and what we would do about it if we were in charge. While being in charge of cleaning up this economic mess is about the last job I would personally aspire to at the moment, that didn't stop us from coming up with some interesting ideas. This then is the first plank in the Allen-Economy Economic Stimulus Plan of 2009.

You might think with the economy on the skids, that consumers could care less about buying green products -- regressing to old habits of purchasing those less ecologically fit items that generally cost less (often significantly less) than their green counterparts. If that's what you thought, then you thought wrong.

Today one of my clients and I drove up to Riverside, California so I could do some research for a project we're working on. On the way through town, we passed numerous empty houses with uncut grass and empty rooms -- and For Sale signs posted out front. Some of the signs had an added note: Bank Owned. California's Inland Empire -- the inland area of Southern California surrounding the cities of Riverside and San Bernardino -- was booming just a few years ago. Today it's a bust. According to an article in today's New York Times, the area's unemployment rate is hovering at 9.5 percent and 350,000 homes have gone into foreclosure -- with a local population of about 4.3 million people, that translates into one out of every three homes.

However, among all these dark clouds silver linings are starting to appear.