Guest post by Greg Smogard:
Last September, I was delighted to host one of the sessions for the Florida Business Incubation Association’s (FBIA) Fall Conference on our beautiful University of South Florida’s Sarasota-Manatee campus. It was at that session that I had the pleasure of meeting Charles Ross, our keynote speaker, who after my presentation asked if I would be willing to contribute to the International Business Innovation Association blog (InBIA). Although I don’t typically blog, I wanted to support the important role that ESOs and all of you play in the global entrepreneurial ecosystem, so here is my first of two blog posts.
2021 is behind us and 2022 has arrived. Sometimes, the more things change the more they stay the same. Just when we thought that COVID was winding down, it comes roaring back affecting all aspects of our lives, including major changes in how many people now view their jobs, the world of work and their quality of life.
At this time of year, the world is typically full of predictions for the months ahead and beyond. Good luck with that. I cannot remember the last time a single event directly impacted people in every corner of the globe at more or less the same time and with more or less the same challenges. What possible implications can this experience have for us as individuals as we move forward into 2022? As Entrepreneurial Support Organizations (ESOs), what possible implications can this unique event have for you, your team, your clients, your mentors, and your future prospects over the next 12 months?
Over the last two years we have witnessed the personal and economic disruption and devastation inflicted upon us by a global pandemic, but we have also been inspired by the courage, commitment, innovation and determination of our fellow human beings as we battled back. Things are changing – attitudes are changing, businesses and organizations are changing, jobs are changing. There is also a new segment of entrepreneurs emerging who represent a new set of opportunities and challenges for ESOs. 2022 is positioned to be a pivotal year full of opportunities for innovation and reimagining the way we do things all over the world. That means ESOs will become an even more critical component of the global entrepreneurial and innovation ecosystem as this change evolves and accelerates.
Successful ESOs have grown accustomed to periodic economic upheavals and dramatic changes to the workforce and the need to adapt, but I think this time may be different. Over the last couple of decades, we have experienced the Great Recession, the expansion of the gig/freelance economy, the prediction of massive job displacement due to the accelerating use AI and other “cutting edge” technology, a global pandemic and now the Great Resignation.
For many of us, these frequent and massive changes can become overwhelming – in the last two years, many small and medium sized businesses and their associated jobs have been severely negatively impacted or eliminated. For others, of us, this time of change is the beginning of a new world of opportunities. In 2013, I wrote a “A World of Opportunities for Aspiring Entrepreneurs: Creating Your Own Job in the New Normal” a book about considering entrepreneurship as a response to the major job displacement resulting from the Great Recession of 2007-2009. At the time, I thought the recession would be the single biggest negative economic event I would see for the remainder of my life. Wrong! That’s why I am not making any 2022 predictions!
Rapidly changing events can become catalysts for motivating more entrepreneurs, both voluntary (those who proactively choose to start a new business) and involuntary (those who reactively choose to start a new business due to job loss, workforce disruptions, lifestyle changes etc.).
As a result of the pandemic, I believe a new cohort of entrepreneurs is emerging, and they are somewhat different from the more traditional entrepreneurs with whom ESOs have been working. I refer to this new cohort as “transitional entrepreneurs.” This group is a combination of people who left the workforce throughout the pandemic and those who have resigned during The Great Resignation. In the US Bureau of Labor Statistic’s most recent Economic News Release, more than 20 million resignations have occurred between July and November, 2021, averaging over 4 million resignations per month (https://www.bls.gov/news.release/jolts.t04.htm). That number is substantially higher if you factor in earlier months.
The big question is what are all these individuals doing for employment? Many, have found better positions and have re-joined the workforce. However, based on U.S. Census Bureau’s Business Formation Statistics since the start of the pandemic, Monthly Business Applications have set records (https://www.census.gov/econ/bfs/index.html) so we know that a part of this group is choosing to work for themselves.
This new cohort of transitional entrepreneurs represents both exciting new opportunities and challenges (see Part 2 in February) for ESOs, their membership, mentor, resource and funding networks. To help us more clearly identify the opportunities, we should examine some of the emerging characteristics of this new segment. Based on the daily media reports we have seen throughout the pandemic and my own personal experience, the first wave of people leaving the workforce voluntarily or involuntarily seemed to be influenced by:
- the economic shutdown and job displacement,
- safety concerns,
- childcare issues,
- school closures and,
- early retirements.
However, in addition to these factors, over the last few months even more people are leaving the workforce due to additional considerations like:
- job satisfaction,
- quality of life,
- work from anywhere,
- and salary issues
It remains to be seen whether this is a temporary or more permanent trend. Either way, it is a major opportunity for ESOs who can adapt to this new influx of entrepreneurs. Although each entrepreneur’s story is unique, some of the characteristics I have observed which ESOs should consider are the new entrepreneurs’:
- Access to funding from new, temporary government subsidies, savings, stock market (day trading) etc.
- Increased willingness to work from home and/or anywhere, including international locations
- Migration from high cost to more affordable locations
- Motivation to try something new -maybe even part-time startups
- Increasing priorities of quality of life and better job satisfaction
- Willingness to weave or “ boomerang” in and out of entrepreneurship depending on rapidly changing economic and workforce factors.
- New pool of potential, multi-generational mentors and business partners
I want to highlight two major opportunities I see for ESOs over the next few months.
Increase Your Market Awareness – NOW
Although many of these transitional entrepreneurs are motivated, skilled, may have some startup funds and may be moving quickly, they will still need expert advice to guide them through the startup or managing a small business process. To a newcomer, the “start your own business” category can appear to be very noisy, confusing and complicated with a wide array of options and support services to consider. Many will not know how to take the first step or where to look, depriving them of access to valuable expertise and guidance offered by your organization.
Therefore, I believe by creating awareness in the marketplace and promoting your value-added services, ESOs can capture a new segment of clients for your organization. Based on my personal experience and also on working with a lot of ESOs, startups and investors, one of the most common pieces of advice offered to early-stage companies is to avoid the “build it and they will come” concept. Today, as part of the entrepreneurial ecosystem I think we need to heed our own advice.
By increasing your promotional efforts now via marketing campaigns across multiple channels, bootcamps, hackathons, workshops, speaking engagements, articles, blogs, webinars, podcasts and event sponsorships, your organization should have a better chance of attracting the attention of some of these transitional entrepreneurs and differentiating your expertise and services. This opportunity window has already been opened and I don’t believe it will stay open for long – so move quickly!
Be more proactive on the front-end of the startup process
Based on my experience over the years, many ESOs are structured to engage with the founders once the idea and the business plan are well underway. However, with this new cohort developing so quickly, I believe that ESOs that can work closely with the founders at the ideation stage will not only have a competitive advantage, but may significantly contribute to the future success of the startup. By helping the founders think more critically about potential opportunities, utilize a faster and more effective creative design process and remove some of the biases in their early business decision making, the ESO/Founder/Mentor/Investor relationship and outcomes for 2022 may add a new dimension to the startup process. To do so however, will require that many ESOs will need to review their current business model and services and possibly recalibrate some of their offerings to address the requirements of these new transitional entrepreneurs.
2022 will be a very exciting year and bring new opportunities for ESOs around the globe, but it will also bring new challenges. In Part 2 in February, I will discuss some of those challenges and suggest ways that ESOs can address them and provide enhanced assistance to both to their new and existing members and networks.
(Coming in February- New Year- New Opportunities – New Challenges -Part 2)
Greg Smogard, PhD., is the author of the book, “A World of Opportunities for Aspiring Entrepreneurs: Creating Your Own Job in the New Normal.” He has worked with Fortune 500 companies and global brands in more than 40 countries, held management positions at American Express’ Latin American Division, Blockbuster/Viacom and worked with, mentored and invested in multiple startups throughout his career. Dr. Smogard is currently the Assistant Vice President of Innovation and Business Development at the University of South Florida’s Sarasota-Manatee campus. He can be contacted at [email protected]