These are tough times for entrepreneurs. We are going through one of the worst financial markets crises in history. The meltdown in financial markets has plunged economies around the world into a recession. Entrepreneurs are finding that investors have all but disappeared and revenues are declining as customers cut back spending. Given these woes in the capital markets and the economy, it seems that this is a very bad time to be starting a new company or to grow a startup business.
Yet, history suggests that difficult economic conditions may actually be the best of times for entrepreneurship. Like a lotus that thrives in a dirty swamp, some of the most innovative companies have emerged during deep recessions. And just as the lotus relies on the swamp for its nutrition, startup companies can actually benefit from difficult economic conditions. The Great Depression of 1929 was the most severe and prolonged economic crisis the world has ever seen. And yet, it was during these times that great companies like Motorola and Texas Instruments were founded. Ironically, it was during the Depression that Fortune magazine was launched, when there wasn’t much business to talk about! The next biggest recession the United States experienced was in 1982, as the economy shrank by 2.2% and unemployment spiked at 10.8%. However, it was during this time that we saw the birth of the IBM PC, the founding of Sun Microsystems, and the creation of Cisco Systems. These events gave birth to the PC industry, the computer workstation industry and the networking industry. Twenty years later, as the U.S. was again mired in recession in 2001, Appl