“I am really concerned about starting a new company right now. I think the world is too unstable and it’s just too risky,” a very close friend of mine was relaying to me the other day. “I have a job. I don’t want to voluntarily quit, have my company fail and then struggle to find something on the other side.”
“You need to look at things differently,” I responded. “You need to look at the extraordinary opportunities and the lower barriers to entry for starting a company right now. You can have access to people and talent that you would not have had previously.”
“Yes, I know, but I am still worried,” my friend immediately responded. “I guess I want to have my cake and eat it.”
As technology futurist Kevin Kelly would say, right now is the best time to start a new business. Unfortunately, many potential founders, like my friend, are fearful. This is not anecdotal. Between 1978 and 2012, the number of new companies declined by nearly 44 percent, according to the Kauffman Foundation.
Paradoxically, recessions and unstable periods present the best opportunities to start new companies. During the 2008 Financial Crisis, billion dollar startups like Uber, Airbnb, and many others were founded partly as a response to changing market dynamics.
Related: What the Work-From-Home Boom Means for Your Future
The present day is no exception, offering once-in-a-lifetime opportunities and unfair advantages to potential entrepreneurs. Among these are increased access to people and talent at lower and negotiable costs, and an environment in which consumers are more willing to try new products and services — often out of necessity.
Increased Access to People and Talent
During boom periods, engineering, design, product and sales talent can be incredibly challenging to recruit and eventually close. Not only is the talent scarce on the market, but the best ones often command fees that can quickly bankrupt a nascent startup if they do not show value from their hires quickly.
Now, many established companies and even startups have laid off talent due to decreased marketplace demand. And due to larger market dynamics, overall salaries have also declined for once in-demand positions.
This has opened up people and talent-recruiting opportunities for entrepreneurs; with the ability to access talent that is critical to early stage growth that would otherwise be lured by larger salaries or more stable opportunities. Entrepreneurs can also rely more on alternative compensation schemes like equity to lure potential hires as the cash compensation and bonuses become more scarce.