Entrepreneurs Take Risks Despite Downturn Even in good economic times, most new businesses are destined for failure. But despite the odds and the down economy, more people may choose this uncertain path now than when the economy was booming. One entrepreneur says that's because the upside can be greater than the downside.
NPR logo

Entrepreneurs Take Risks Despite Downturn

  • Download
  • <iframe src="https://www.npr.org/player/embed/96706838/96708070" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Entrepreneurs Take Risks Despite Downturn

Entrepreneurs Take Risks Despite Downturn

  • Download
  • <iframe src="https://www.npr.org/player/embed/96706838/96708070" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


From NPR News this is All Things Considered, I'm Michele Norris.


And I'm Robert Siegel. The Dow Jones fell again today because of discouraging news about job and retail sales. Over the past two days, the Dow has dropped nearly a thousand points, and new employment numbers that come out tomorrow expected to continue a downward trend.

NORRIS: Add to all that the difficulties in getting credit, and it's a pretty bad time for new businesses. That's what you might think, but not necessarily. As NPR's Tamara Keith has discovered, the daunting odds haven't entirely dampened the entrepreneurial spirit.

TAMARA KEITH: There's just something about entrepreneurs, they are ridiculously positive people. They see opportunity where others see pain and they believe their business idea is awesome. Better than the rest. They kind of have to, otherwise why devote all that time and energy?

Mr. ADAM HEALEY (Co-founder, VibeAgent.com): So this is our homepage and you just simply enter the destination that you're going to and click search.

KEITH: Two years ago, Adam Healey and a business school classmate founded vibeagent.com.

Mr. HEALEY: What we're doing now is, we're going out and we're grabbing, in real time, rates and availability from over 30 different travel sites.

KEITH: The hotel search engine went live just about a year ago. Now, they have 16 employees and recently wrapped up a $3 million round of financing.

Mr. HEALEY: And, you know, that's fortunate that we got that done recently before this, you know, the current economic downturn.

KEITH: Do you think it would be harder today?

Mr. HEALEY: Absolutely it would be harder today. Absolutely it'd be harder today.

KEITH: Healey says VibeAgent has ditched plans for market expansion and it's just working to make a profit.

Mr. HEALEY: You know last week, we had a budget in place which was focused on going out and raising another round of capital in 12 months. Today, that's not what we're going to do.

KEITH: Healey is 33 years old. Back in 2001 during the last recession, he was part of a different start-up. That business didn't survive.

Mr. HEALEY: The big companies that were being listed on NASDAQ that were going to come buy us, they all exploded.

KEITH: So he understands the perils, but Healey insists this company is well positioned to survive the downturn. Andy Tang came up with his golf-related business idea while out on the course. He is obsessed with stats and writes all kinds of extra information on his scorecard. Now he's in the final development stages for a small electronic device to help golfers track their scores, putts, fairway accuracy, and more.

Mr. ANDY TANG (Entrepreneur, Myfreehandicap.com): It's a digital scorecard that tracks more stuff.

KEITH: Then all that data will go up on his company's website, myfreehandicap.com.

Mr. TANG: So we just launched the site yesterday, so we're kind of working on it.

KEITH: The site has a social networking element, kind of like Facebook for golfers. Tang just graduated from the Darden School of Business at the University of Virginia this past June. Passing over at least two lucrative job offers to chase this dream. So far, the 35-year-old has funded the whole operation with his own savings. A few months ago, he says, outside funding seemed like an option. Now, not so much.

Mr. TANG: People just - it's not comfortable to invest their money right now. The first thing they ask is, are you generating any income yet?

KEITH: But he's not giving up. Tang knows about struggle. He supported his family for years after his father's business in Hong Kong went bankrupt. And when he was in college, Tang opened two successful Chinese restaurants but they didn't start out that way.

Mr. TANG: I start with nothing. I was really, really poor. At one time I was living out of my car.

KEITH: Tang believes the upsides are far greater than the down sides, and he says he's willing to take the risk for a while. And it seems more people may be choosing this uncertain path now than when the economy was booming. Tang's entrepreneurship professor at Darden, Philippe Sommer says it just makes sense that more people might try making it on their own as major corporations and banks struggle.

Professor PHILIPPE SOMMER (Darden School of Business, University of Virginia): It's easier to make that decision when there aren't three bankers saying, please come work for us for $100,000 a year. So in some ways it's much easier in a down economy to take the leap.

KEITH: Plus, he says, entrepreneurs are the kind of people who always believe their businesses will thrive regardless of the odds. Tamara Keith, NPR News, Washington.

Copyright © 2008 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.