Times are tough. Are we heading into a V-shaped recovery, or are we heading into a recession that will shake the world to its core? What if I told you it didn’t matter?
Don’t get me wrong. I know the numbers.
Los Angeles County’s unemployment rate went from 3.9 percent in January to 20.3 percent in April. According to the Los Angeles County Economic Development Corp, it could reach 32% by the end of May. That’s the highest rate of unemployment since the Great Depression.
This past February saw the Dow Jones Industrial Average reached an all-time high of 29569.58. By March 23 it dropped to 18,591.93. Then, last week, it closed at 27,110.98. While our financial future may seem uncertain, remember, your future is in your hands. If you want to survive and thrive in the future, you should take your cue from the past.
The Great Depression
According to Ivan Light, Sociology Professor at the University of California, Los Angeles, financial situations like the Great Depression create a specific breed of entrepreneurs. He calls them “survivalist entrepreneurs.” You may not think of yourself as an entrepreneur. Still, I can tell you this, no matter how you got into the printing industry, whether you inherited the company from your parents, joined your brother in a business venture, or started your own company, at this time, we all need to think like entrepreneurs.
During the Great Depression of the 1930s, many entrepreneurs started companies out of necessity. The good news is they have survived until today.
In 1928, husband and wife team O.D. and Ruth McKee sold five-cent cakes out of their family car in Chattanooga, Tennessee. By 1934, in the depths of the depression, they bought a bakery and started a company that today is worth an estimated $1.4 billion. The McKee’s granddaughter, whose image appears on the company’s packaging, is the current Executive Vice President of McKee Foods, the makers of Little Debbie cookie and cake-based dessert snacks.
Do you enjoy McDonald’s french fries? If so, you owe it to an Iowa-native who bought a potato farm in 1929 and worked the land himself. This man was also an innovator. Due to the freezing process he invented, he became known as the father of the frozen french fry. Today, the J.R. Simplot Company is worth an estimated $8 billion. This family-owned business supplies a third of the nation’s french fries, including those you get at McDonald’s. They’re also one of the world’s leading agribusiness companies with operations in the United States and around the globe.
The Great Recession
Just as the Great Depression spawned new companies, many companies were born during the Great Recession of 2007 to June 2009. Today, many of these are household names.
- Groupon, 2008: today the company is valued at $726 million
- WhatsApp, 2009: Facebook purchased the app, which now has more than 2 billion global users, for $19 billion in 2014
- Venmo, 2009: payment processor Braintree bought Venmo for $26 million in 2012, and digital payment giant PayPal then acquired Braintree for $300 million in 2013
- Uber, 2009: today the company is valued at $47 billion
- Square, 2009: more than 30 million companies use the platform. It’s currently valued at more than $23 billion.
- Instagram, 2010: Facebook bought the app in 2012 for $1 billion
During the Great Depression and the Great Recession, the entrepreneurial spirit led to new, exciting, and long-lasting opportunities.
How Do You Define an Entrepreneur?
According to Brett Nelson, Financial Editor and Forbes Magazine contributor, “Entrepreneurs, in the purest sense, are those who identify a need, any need and fill it. It’s a primordial urge, independent of product, service, industry, or market.”
That urge to create something new comes from being aware of your situation and taking the steps necessary to change it. Take, for example, Jim McKelvey. He’s an artist, a glassblower. One day a person walked into his studio and wanted to buy some of his work. The client wanted to pay with her American Express card. McKelvey didn’t accept credit cards. He lost the sale. When the client left, McKelvey asked himself why don’t I take credit cards? At that moment, he became aware of his situation and, independent of his current product, came up with Square. He imagined a credit card reader that could attach to a mobile device, so any company, especially a small company, could accept credit cards anywhere, any time.
Before Square, there were credit card readers, but a company had to be large enough and have a certain level of sales to have a reader. Also, readers were connected through a phone line and thus were stationary. With Square, a small company that only makes one sale a day can use the service. When McKelvey came up with Square, he changed what was happening within an industry that already existed. He just found a better way.
There were taxies before Uber.
There were coupons before Groupon.
These are all examples of creating something new within an existing industry. So understand, when I talk about entrepreneurs, I’m not saying start a new company. I’m not saying you should buy new equipment. I’m talking about “thinking” as an entrepreneur.
The companies born from the Great Recession all have something in common. They took advantage of new technology. The iPhone 3G was released in July of 2008. The iPhone 4 was released in January of 2011. This new technology, along with faster Internet speeds, made it possible for most of these companies to exist.
Entrepreneurial Thinking and the Printing Industry
Our industry has seen an explosion of new technology in the past few years. Digital presses allow for variable images and text. Wide-format can print on a myriad of substrates. Technology varies among companies, and the way you utilize that technology is unique. For your company to survive, you’ll need to exploit the technology you have, take stock of your employees and their abilities, and update your client base.
It seems that the epiphany experienced by Jim McKelvey and Square is the same thing that happens when an experienced sales rep meets with a client. The rep looks for the company’s pain points and finds a solution to the problem. Now expand this to your whole company.
As an entrepreneur, you need to ask yourself some serious questions.
- What problem needs to be solved?
- What can I do that’s different from the norm?
- What else can I do with my existing equipment?
- What current clients will survive this business cycle?
- What new clients can we service?
Think back to the companies created during the Great Recession. The public, in general, needed a way to save money. Groupon provided people with deals. WhatsApp provided people with free texting, both local and international, and free phone calls (remember, back in 2007, we had to pay to send texts). These companies reinvented the way the current industries worked.
I wish I could tell you where the economy is heading. I wish I could identify the hottest opportunities for print now and in the future, but I can’t. Each of you has your own technology. Each of you works with a unique team. Each of you will need to determine the best path for you and your company. What I can do is remind you of the success of companies like Little Debbie, Square, and Groupon. These companies and many others were born at a difficult time. They’ve survived until today because of their entrepreneurial spirit.
Remember, if the recovery is V-shaped or U-shaped or if we’re about to see another recession, you can and will survive if you keep your entrepreneurial spirit alive.