We’re entering a recession, that much is clear. How bad things will get all depends on how well central banks engineer this landing (though my guess is we’re probably way past a softish one and might go out with a large bang instead) and while the jobs market is still unusually strong, cracks are beginning to show, especially in Silicon Valley aka the home of tech. House prices have already started to come down in this most pricey region. You can blame a nasty mix of tech layoffs, rising rates, inflation and a general bad feeling about things. (Read here 4 ways that you can recession-proof yourself).
My guess is that this will spread to the rest of the US and house prices will start to come down across the board as layoffs intensify and as this recession starts to grow some legs. Uncertainty and fear aren’t exactly your combo for high(er) asset prices. Quite the opposite, infact. And in this kind of climate, I would bet that the last thing anyone would wanna do is to quit their 9-to-5 to start their own risky biz! After all, in bad times, you want to hold onto as much financial certainty as possible. More than 20% of start-ups fail during their first year alone and to throw one more stat at you, more than 90% of start-ups fail. So you see where I’m going with this!
But obviously if you make it, there’s a chance you could really make it. And yet, despite these grim start-up stats and despite the grim economic prospects, people are still launching their own companies or at least they’re thinking about doing so! Here are some wildly good stats: 2 in every 5 Americans plan to start their own biz! I mean that’s one hell of a stat, if true! Of course this was found on good ol’ google but I am choosing to believe it. I also read that 55% of entrepreneurs plan to quit their job within the next year and over one-third of start-ups built this year, in 2022, will come from first-time entrepreneurs.
Now’s the time to go for it – without looking back!
People are clearly willing to risk-it-all and try something risk-ay but the chance at working toward something you seriously care about and the self-fulfilment that I can imagine goes along with it seems worth it enough. And precisely why many push so hard to do it. I came across this awesome article on what it was like working at payment company Stripe during its early start-ups days, you can read it here. I don’t want to ruin this great read, but I do hope the world will return to a state where working hard and grinding together can be celebrated!
Work-life-balance is always important and should be cultivated but different points in your career will need different balances! And sometimes a non-balance is just what you will need. Career fulfilment is something that needs to be filled. And when we feel like we’re doing meaningful, productive, challenging work, we feel great. All this ‘quiet quitting’ stuff seems like a sure way for one’s passion and purpose to dwindle away. Too many people spend too many hours on stuff that means nothing to them. But that’s not how we’re built.
Humans are made to feel productive. And if we don’t care about the work we’re doing, we’re going to make sure we’re as productive as possible without getting fired! That’s no way to go on. Whatever stage of life you’re at, go and find something that gives you meaning and don’t let go of it. It needn’t come from work but it could!
My guess is that if you’ve always had a desire to start something of your own, the pandemic might very well have brought it right to the surface! A pandemic had the effect of giving us a real push to follow our dreams and for many that looked like starting their very own biz.
The pandemic gave many a sense of urgency. Like we needed to chase our dreams. Now. Not in years to come. Because as we all know, life gets in the way and things get busy. It’s easy to put off your dreams. And while I’m no entrepreneur (though I’ll never say never!), I gladly jumped on their bandwagon and participated in several fundraising rounds during the pandemic – the dream is well and truly alive! You can read about my journey with start-ups here, only if you’re curious.
My female friends are powering on with their own ventures
I’ve even noticed this trend to start something among my own circle of friends. One from Long Island has been in real estate for a while. She has a super good grip of the market in New York City (her niche) so it’s no surprise that she’d want to buy a pad of her own as an investment to take advantage of rising rental prices! But she tells me how properties in NYC are too expensive (yup, same issue here across the pond so no need to have FOMO!) and she said has has no way of competing with the cash offers and the well-above-the-asking-price offers (read here what’s going on with real estate right now and what’s to come) so she snooped around the marketplace for a solution to her problem: pooling capital from many retail investors on real estate deals so you buy a slice without actually having to buy the entire pie.
But she found that many of these required large sums (>$50k) as a minimum while others required a base level of income (>$200k) or an asset base (>$1m) so she went about creating something on her own for millennials and gen zers so that we get to own (at least a piece) of real estate. She sent me round her deck and boy am I excited for what she’s going to build.
Another person I came to know quit her high-flying job in banking during covid to start her own biz: an investment app designed for women. She noticed a whopper gap between the professional men and women in her life: the professional women who were clearly smart, capable and so on were not investing at the same rate as the men were. Something was holding them back so she went out to fix this.
Of course I got super excited by her venture so I immediately told her I’d be there for anything she needs. Within the space of a few months, I watched her build her team of talented individuals. She’s now hoping to raise some big moola from VC investors. Scary stuff but she’s got this in the bag! Despite what you read about in the news that VCs are zipping their wallets, there is still appetite for long-term growth opportunities. You’ve just gotta be resilient enough in this current climate. Something tells me my friends definitely are! Not that I’m biassed, of course!
If you risk nothing you stand to make nothing
If start-ups weren’t risky there’d be little to no reward! The risk lies in the fact that more than 90% of start-ups fail but if you’re in that 10% bracket and you go on to build something incredible, you could be looking at a whole lot more. Now, if you’re in your 20s, you’re more likely to be able to set up your own biz because if it all fails you can move back in with mum and dad till you get back on your feet and by that I mean find a 9-to-5 so that you can start supporting yourself again!
But if you’re 40 and your venture has flopped on its head now you’ve gotta find a way to pay off your mortgage and moving back home ain’t so simple. Though I know what you’re thinking: someone who’s older will be more financially independent than a young ‘un. But to tell you the bitter truth, most people don’t have more than £2K in savings (at least not here in the UK) and that’s stretching it.
Unless you’ve made a conscious effort throughout your adult life that you want to start your own biz, and you’ve put some money aside (because you can’t exactly raise from VCs if you’ve got nothing to show for!) then it makes sense to go down that route. A friend of mine is in her mid-20s and she’s started her own biz but she has a chunk of savings to keep her afloat and already owns her own property.
Whatever stage of life you’re at, anything’s possible. But the younger you are, the easier it is to take risks.
High inflation, high interest rates and a looming recession ain’t stopping no one! Builders will keep on building.
I can’t wait to see what happens next.
Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment.
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