By Alex Schiff, University of Michigan
Are we in a bubble or a boom? Are we all screwed or are we seeing the dawning of an entrepreneurial revolution?
Everyone is starting a company these days. I’m doing it, my dad’s doing it, friends of friends and everyone else under the sun are becoming founders or early employees. At the same time, valuations of companies like Facebook are soaring to levels seemingly divorced from any concept of reality. Investors are throwing money at entrepreneurs and ideas with no product and even less traction. Everybody’s partying like it’s 1999.
But it’s not 1999. The fundamentals of the economy and society as a whole have changed. Everyone is online. The infrastructure costs of implementing an idea have plummeted. Investors are no longer ignorant of the web. And the ideas being implemented today aren’t just “take this physical concept and put it online.” They’re revolutionizing the way businesses think about marketing. They’re turning our phones into wallets. And yes, they’re even solving the “text myself things I need to remember” problem.
Okay, I admit it. That last one was a shameless plug. But I digress. Are we in a bubble?
It. Doesn’t. Freaking. Matter.
Let’s be honest, entrepreneurs. Would rough times really stop you from pursuing your vision? If I read one more bubble-pocalypse-we’re-all-going-to-die article, I’m going to seriously lose it. It’s not like venture capital (or angel investing or incubators or anything else) is going to get wiped out if a bubble bursts. Some people will lose significant amounts of money, but we’re not talking industry eradication here. And even if there was a wipe-out, the best entrepreneurs would still figure out a way to push forward on their own. Investors may grease the wheels, but they aren’t the wheels.
In the end, that’s what being an entrepreneur is all about. It’s figuring out how to make it work no matter what happens. When the SEC makes your entire business model illegal, you figure out how to pivot into something profitable. When Google comes into your space and snaps up your market share by undercutting your prices, you figure out how to provide unique value and get it back. And when investment capital dries up, you figure out how to make things happen on a shoestring budget. Shit happens. It’s our job as entrepreneurs to figure out how to overcome it.
I was nine when the NASDAQ peaked in March 2000. My greatest accomplishment at the time was a report on the state of Delaware. I probably have no business writing about this subject, and I’ll probably get flamed again across the Internet for it. But as anyone who has read an article of mine knows, I wear that lack of experience on my sleeve. It’s that “naïve it-will-all-work-out” attitude that makes me unafraid to take a leap of faith on an idea.
I did experience another bubble burst though — the infinitely more devastating housing bubble. I graduated high school in May 2009, and I moved to Michigan that June to find a summer job before going to college. Does anyone remember what June 2009 was like? 467,000 jobs were lost that month! Michigan’s unemployment rate was just shy of 14 percent. If college-educated professionals couldn’t even get jobs as waiters and valet car parkers — how could an 18-year-old with no tangible skills?
So I became resourceful. I taught myself how to fake an interview as a social media marketing expert and nearly got a job doing that. I got a job driving around some sketchy guy to sales appointments who had “donated his car” (yeah, and I’m Barack Obama). I worked for my friend’s dad manually checking payment receipts until I couldn’t see straight. I made enough to get by until better opportunities came up.
The reason I bring up that summer experience is because I think that’s what would happen if a startup bubble burst — we’d just get a little more resourceful. The articles being written today make it sound like waves of companies would just give up and go home, and that’s just not true. Most of us will simply dig our heels in, go back to the drawing board and figure out how to get to profitability one way or another.
It would be harder, the product might have to change and we might need to become moonlight entrepreneurs while working for the man, but we’d make it work. Boom or bust, we’re just crazy enough to keep trying.
Alex Schiff is a co-founder of The New Student Union