Let’s begin by looking at the last decade. Much of the innovation that defined the American experience in our first two centuries stagnated during the past 10 years. But this innovation stagnation has created the greatest opportunity we’ve ever seen for people wishing to start a new business. Provided, of course, that their product or service either improves the life of their customer or provides something their customer is already using but at a lower price.
In the 20th century, America grew to become the world’s greatest economy because of entrepreneurial innovations. From Henry Ford (cars) to Abraham Levitt (homes) to Steve Jobs (iPods, iPhones, iPads), entrepreneurs created new products and services so compelling that consumers had to have them. Americans wanted to work harder than ever to purchase items that hadn’t even existed when they were born. Moreover, each of these new products or services created entire industries of support products, such as gas stations, restaurants, furnishings, cell phones, etc.
However, for entrepreneurs today, the last decade of innovation stagnation has created the greatest economic opportunity in history because there are so many readyto- be-implemented advances in virtually every sector of our economy. The greatest personal fortunes of 2020 are about to be created by entrepreneurs who either lower the price of existing products or introduce new products and services to our economy.
From Wall Street to Main Street Many people blame today’s financial crisis on Wall Street. However, once the crisis had begun, the crash on Main Street was caused by consumers realizing the emperor had no clothes—that many of the products and services they were buying were simply not worth their cost.
The same house that sold for $250,000 in 1999 was not worth $450,000 in 2009—even though many homebuyers were willing to pay that much for it, due to easy credit and a fear that prices would keep rising. A new car with the same features as last year’s model did not justify an annual price increase, especially in the summer of 2008, when gasoline reached $5 per gallon and consumers wanted more fuel-efficient vehicles. And no mass-produced handbag was really worth $10,000 or more.
When consumers rebelled against paying more for the same or less, businesses were forced to cut their costs. Employers worldwide laid off millions of employees and blamed it on the recession.
The failure by many businesses to keep up with their customers’ needs created an unprecedented opportunity for entrepreneurs.
When we look closer at what happened, with the benefit of 20/20 hindsight, we see the decline in consumer purchasing and the resultant unemployment were not caused by a traditional economic slowdown. They were both caused by the inability of many businesses from 1999 to 2010 to keep up with their customers in an expanding economy by providing new or improved products and services. This caused consumers from 1999 to 2010 to spend money on the same products and services, bidding up the prices among themselves beyond their true value, rather than spending money on things like wellness, better cars or better housing that would improve their lives.
More significantly, this failure by many businesses to keep up with their customers’ needs created an unprecedented opportunity today for entrepreneurs and intrapreneurs (those who use entrepreneurial skills within an existing organization) to start new businesses that provide real value-added products and services to consumers and businesses. There was already a backlog of what I term Ready-to-be-Implemented Technological advances (RITs) before the great crash of 2008, and the need to implement them and retool our economy is now greater than ever.
As we assimilate the events that led to the great crash of 2008, as well as where we are now, it’s clear there is no better time to step up and be the entrepreneur or intrapreneur who has enough vision and courage to give consumers what they really want: innovation. How do you do this? Consider these strategies:
Master your industry. Learn as much as you can about your industry. As you learn more, your functional skills will improve and you will build a network, adding value to your new idea.
Fix the world. Notice the problems your customers have and fix them in a new way or in a less expensive way than your competitors.
Focus on the solution. Instead of focusing on the struggling economy, focus on ingenuity. How can you separate yourself from the crowd?
Hold on to your dream. Don’t let past failures or dire economic forecasts make you a pessimist. Keep your youthful dreams alive and create your own opportunities.