Entrepreneurs Should Love a Recession
When is the best time to launch a new venture? Must be when the economy is growing and the venture capital is flowing, right?
Um, not so much. According to Gregg Vanourek, a founding partner of New Mountain Ventures, many of the best companies are born in times of economic malaise.
"Many people assume that entrepreneurs are allergic to recessions," he writes on Harvard Business Publishing. "It turns out that downturns can be times of tremendous opportunity -- and, yes, profit -- for entrepreneurs. But only if they play their cards right."One reason: Less competition. Many other entrepreneurs will be scared off by economic dark clouds, meaning that when you jump in you'll receive more attention from potential funders and customers.
A downturn also saps the energy of established competitors. While they are hunkering down, you'll be gearing up for a run at them under the radar.
So if you are thinking of starting a new business, you might consider the slowing economy a competitive advantage.