By Kashyap Deorah
Recession is a great time to be an entrepreneur. Why, the only time to be a true entrepreneur. Some of the best businesses have been built during a slowdown. The last big slowdown after Bubble1.0 saw companies like Google and Facebook enter the mainstream. It is sometimes too easy to forget that while start-ups were folding and fair-weather entrepreneurs were moving on to risk-free green pastures, these companies were still figuring out their business model with not much money left in the bank to pay half-decent salaries. Here are the top 4 reasons why it is a great time for you to build a company.
Customers will fund you, not Investors
College graduates like to come up with ideas that are fund-able, not sell-able. Although it helps to have financial backing that lets you look a little farther ahead than paying for your meals this week; in 2007 & 2008, the pendulum swung a little too far in the other direction. Entrepreneurs spent more time trying to answer what idea an investor likes, rather than what a customer likes, or worse still, who is their customer?! Given the nascent state of “organized” angel investing and VC funding in India, it was a risky proposition to bet your business on the investors’ judgment. Now, with investors taking flight from early stage investments, entrepreneurs are forced to ask who the customer is and why the customer will pay them – the two most relevant questions you should ask yourself everyday you wake up in the morning as an entrepreneur.
You will get Pigs, not Chicken
In an American breakfast (eggs and bacon), the chicken is interested, but the pig is committed. In happy times, everyone wants to be an entrepreneur, for all the wrong reasons. Every entrepreneur has a story to tell about the resident consultant in her start-up who loves to talk the talk but never walks the walk. The chicken who puts her eggs in many baskets, but never puts her skin in the game. There used to be people who joined startups for, wait a minute, high salaries! Fortunately, those days are gone and so are those people. Your team would be committed and on deck for all the right reasons. A lot of good talent would be readily available, and with the right expectations. The hardest thing to do in any start up is to build a team. So do pick people carefully, even if it takes some more time. The recession will help you make careful and better decisions.
You will solve big Problems, not Trinkets
In a recession, the business world moves in slow motion. Use that to your advantage. Nice-to-have problems would vanish, and must-solve problems would be the only kind of problems worth solving. Problems that are critical to survival, critical to income, critical to cash-flow and critical to steady growth of your customers. If you can understand these problems and solve them during tough times, not only will you get a chance to do so for more and larger customers who would otherwise not care about a start-up; when things pick up, you will find yourself solving a basic problem that customers cannot live without solving. All of a sudden, you will find yourself in a spot where you are golden and people around you will wonder how they ever missed out on something so obvious. Some of the best ideas leave you with that feeling, don’t they? Truth is, it was always simple. You were the one who chose to stick it out and do it.
You will find it Cheap, not Pricey
Chances are that whatever it is you need to build your business would now be readily available for you and at affordable prices. Rents, media, service providers, travel, etc. etc. When liquidity is frozen for everyone, the appetite to offer capital expenditure things as operational expenditure becomes high. For example, a shutdown factory would let you use its machinery without any fixed cost if you generate enough cash to pay the bills. A distributor will let you earn commission on liquidating inventory without you taking the risk of holding any of it, as long as you help mobilize it. Your uncle would let you use his office space that he is not able to rent out, and is happy that you are using the place and keeping it bird-free. Service providers that wanted long term contracts and up-front payments would now chase you to try first and then pay after you use.
We live in a country of entrepreneurs. Look around you, and you will find an entrepreneur in every street corner, in every taxi and rickshaw, in every fish market, and in every technician who visits your home. In a country where the majority earners are entrepreneurs, albeit forced, stop looking for the safety and security of a cushy life in an air conditioned room overlooking water. Live a little. Solve a problem worth solving. Have lots of fun while you are at it. The good life is always one decision away.
Kashyap Deorah is the founder and CEO of Chaupaati Bazaar, Mumbai’s phone classifieds. If you are looking for good deals on computers, electronics, mobiles, automobiles and rentals, call 922-222-1947 and talk to a friendly call center representative. These deals are advertised by thousands of households and local entrepreneurs. You can advertise on Chaupaati too. Just call 922-222-1947.
Kashyap also maintains a travel blog where he logs his travels and tribulations.