Startups and This Recession 1

I’ve seen it in past recessions–more startups. I have only anecdotal evidence, no statistical data, but it still seems like a natural pattern. Some of the people laid off end up starting new businesses instead of finding new jobs.

Over at Small Business Labs, Steve King posts Recession Drives New Businesses. He cites three major-media articles indicating that the startups are coming:

Steve’s in a good place to watch this. His company, Emergent Research, does some of the best research around on small business. It recently released  a study on innovation in small business, and my favorite is its 2008 report on the New Artisan Economy.

From what I see, a couple of startup dampers that could be easing up. Those dampers are confidence and credit crunch.

Confidence, as in “what? Start a business now? Isn’t that crazy?” That seems to ease as the news value dwindles, and people get back to work. And then there’s that other factor, the people who don’t have a choice. They look for work and decide starting a business is better.

The credit crunch has been a real factor from what I’ve seen. And I’m assuming that the recent stimulus package will have some positive effect.

There’s potentially a two-birds-with-one-stone effect through the stimulus package, because freeing up commercial credit and getting the SBA moving again, will also improve the general confidence level.

About the Author Tim Berry is the founder and chairman of Palo Alto Software and Follow him on Twitter @Timberry. Follow Tim on Google+ Read more »

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