Case studies from previous times of hardship, such as past recessions, demonstrates for the strategist opportunities to thrive even in difficult times.
I love those who can smile in trouble, who can gather strength from distress, and grow brave by reflection. ‘Tis the business of little minds to shrink, but they whose heart is firm, and whose conscience approves their conduct, will pursue their principles unto death.
Leonardo da Vinci
The New Renaissance and Entrepreneurship
“The Renaissance of the fifteenth century was, in many things, great rather by what it designed, than what it achieved.” Walter Pater.
The Renaissance took a time of darkness and created a turning point in history due in large part to the ripple effects of the progress/ focus on art, architecture, and science within a society. Similar to the “Original Renaissance”, what we’re currently observing is a return to pulling art and beauty from the doldrums of absolute darkness. In the face of the hardship of a global pandemic/after the tension of the shutdown, economic and political upheaval had lifted, there was not a return to the safety zone. Instead, the opposite- a surge in entrepreneurship, and blazing new trails in lifestyle, such as the surge in homesteading. Visionary, coupled with a return to “the good stuff”. Most importantly, we’re witnessing a reminder of ability to thrive in difficult times. The return of the pioneering mindset, in conjunction with the renewed pursuit of an artful and art-filled life; and recalibrated focus on building our lives has brought on a new Renaissance.
What we are witnessing extends far beyond a mere continuation of another business cycle. The amalgamation of cultural transformations and economic patterns designates this emerging era as a genuine renaissance, surpassing a mere identification of the subsequent era. For business professionals and entrepreneurs, it is crucial to recognize that what has been effective until now, both in recent times and the past three decades, will not persist. However, the encouraging news is that history clearly demonstrates that turbulent economic times often become the playing ground for the strategic entrepreneur, as evidenced by shifting eras in the last century. For example, following the 2008 recession, there was a 17% increase in entrepreneurship. After the dot com bust of the late 90’s, a similar spike.
The Renaissance of the current era is an invitation into entrepreneurship
“Whenever you find yourself on the side of the majority, it is time to pause and reflect.” Mark Twain
Similarly to the way in which Michelangelo is an example of flipping the script during darkness into the Renaissance, recent history showcases the way that entrepreneurs are uniquely positioned to pull economies out of recessions. Not only that, but recessions are a proven breeding ground for startups. The multifaceted reasoning behind this can be boiled down to simplistic takes: first, what’s working now; what’s worked for the last 30 years, is no longer going to work. Therefore, innovative new takes on business will rise to the top. Second, the difficulty of the endurance test that was the era of 2020-onward changed people’s mindsets (similarly to how you see the mark of new eras following major historical events). This isn’t just an opinion-based statement. While it’s absolutely natural to wonder if it’s too risky to start something new when it feels like most are buttoning down the hatches, below is a summary of nearly two dozen examples of how history has demonstrated the opposite to be true. In the midst of others hiding from chaos, the innovator can boldly step out and deliver true value to the world. And often, creating this value directly affects an economy’s recovery from financial turbulence.
Notable examples of business that were created in recessions, and left an indelible effect on their industries in the process:
1893 – The Panic of 1893, a 16-month period characterized by a nationwide decline of approximately 40% in business activity, was notable for General Electric (GE). By 1896, GE had achieved recognition as one of the original 12 companies listed on the Dow Jones.
1907 – The Panic of 1907 resulted in a 30% drop in business activity. During this time, General Motors (GM) emerged as a significant player in the automotive industry.
1911 – IBM made its mark amidst a two-year decline in industry activity, becoming one of the pioneers of the digital revolution.
1929 – The Great Depression had a profound impact, but it was during this period that Disney launched its first animated feature film, marking a notable achievement.
1939 – In the midst of the Recession of 1937-1938, Hewlett-Packard (HP) was founded and established itself as a prominent technology company.
1946 – The Postwar Boom followed the tumultuous years, and despite the Recession of 1958, Hyatt successfully launched its first Hyatt House motel, capitalizing on the growing travel industry.
1973 – The Oil Markets/Era of Contention, marked by an oil crisis and stock market crash, witnessed the emergence of Microsoft in 1975 as a major player in the technology industry.
1992 – The Post-USSR/Era of Markets/Dot Com Boom & Bust era saw Google’s inception in 1998, surviving the subsequent dot-com bubble burst. Facebook, founded in 2004, also weathered the storm of the 2008 recession.
Other notable companies that emerged during challenging economic times include Groupon (2007), NerdWallet (founded after the founder lost his job in the 2008 recession), Uber (2009), Venmo (2009), and WhatsApp (2009).
Current cultural trends work towards the entrepreneur’s advantage
Curiously, and further pointing/indicating that this is indeed a New Renaissance is the renewed pursuit of art, and unconventionality.
In 2020, an estimated 34% of Americans had a “side hustle”. By 2021, that number grew to 2 in 5 Americans (approximately 40%), and that number continues to rise. According to the same report, the trends in the corporate workplace reflect this shift of values: corporations are becoming more comfortable doing business with self-employed individuals that are working remotely, something that will create a “permanent shift in the move towards self-employment.” Given this enhanced legitimacy of remote self-employment, as well as the consistent desire for remote work from many employees, he believes more Americans will consider self-employment.
Students of history are equipped to navigate new era and pull the richness it has to offer.
Act before your competitors arise, but remember: this is a mixture of both striking while the iron is hot, and taking proper steps
