Being an Entrepreneur in the Great Recession

Being an Entrepreneur in the Great Recession

May 26, 2009 by Ted Adler
Lemonade Stand

There is an excellent blog post by Bill Taylor I recently read on the Harvard Business School blog that discussed the difference between entrepreneurs & MBA‘s and who has the upper hand the economy we now face.  In this topsy-turvey economy, with desperation being the mother of invention, we’re seeing both an increase in graduate school applications and start up companies.

Let me start by saying that I see myself as an entrepreneur. I’ve been one since I opened my lemonade stand to finance my baseball card collection in fourth grade. A number of our clients are entrepreneurs too: REALTORS, hospitality businesses, social entrepreneurs such as Choose Responsibility & Given Limb.  The list is extensive.  There are a lot of people out there starting things and when you start something, you inevitably need a web site.  One of my favorite parts of my job is working with entrepreneurs to help them further their initiatives.

On occasion I have been asked to speak to student groups about my experience as an entrepreneur.  I’ve often said that when one is considering starting a business, they should envision the worst case scenario, which is normally something along the lines of “My business idea fails. I lose money. My lifestyle is negatively effected” etc.  I then ask them if they’re willing to accept that scenario as fact?  If the answer is yes, then I encourage them to move forward with it.

When I started Union Street Media in 1999, my worse case scenario was “the company dot-bombs, I’m 24/25/26 years old, I have a great story and I apply to business school.”  Well, the dot-bomb didn’t happen.  I’m now 32 and still haven’t managed to get to business school.  A few years ago when I was asked to speak to a panel of Tuck MBA’s their first week of class that line got the best response of all.

My father, who is both an MBA and an entrepreneur, made an interesting point that the presumption in Taylor’s post is that the two identities are mutually exclusive.

Dad wrote: “The MBA stereotype being referred to is that of the consultant or investment banker, and the entrepreneur stereotype is of a scrappy and even uneducated street fighter.  But as several of the commentators observed, they are both entrepreneurs and MBA’s.  In certain fields like independent institutional money management, it helps to be both.

One reason more MBA’s are not entrepreneurs is the risk/reward:  with the MBA historically most can get high rewards without taking the risk of entrepreneurship.   There is also the matter of defining and measuring outcomes.  If you measure outcomes as expected value, which is the probability of success times the dollar value of achieving that success, the expected value of the MBA is a lot higher.  If you use other measures you might come to different conclusions.

Many entrepreneurs are misfits.  They don’t see where they fit in, so they make their own way.  Most MBA’s are the antithesis of misfits, especially in recent times when business schools have become highly selective.

But business schools study, even revere, entrepreneurship.  Indeed, it was a business school professor who did this research that defined the distinctions.  The observation that entrepreneurs were misfits was something I learned in a business school course on entrepreneurship.  The behavioral dynamic that entrepreneurial decision-making was a function of defining the downside was something I learned in real life when becoming an entrepreneur.”

This month, thousands of students will walk across the stage and officially enter the “real world.”  They will join millions of others currently in the workforce that are trying to best navigate this recession.  I encourage both groups – and even the MBA’s – to consider starting a business or non-profit on their own.  If you decide to take the jump, please contact Union Street Media to help get your web site off the ground.  You’ll find an energetic entrepreneur on the other end that’s excited to help out!

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