Small Might Be Smarter

The latest crop of start-ups looks a lot like the typical woman-owned businesses. Is that bad, or is it time we added another definition of entrepreneurial success?

The best stuff at the International Housewares Show is along the outside walls. Here, in the cheap booths, are the hardy entrepreneurs with their inventions, hoping that the buyers walking the show will hang in there long enough to discover them. In fact, the perimeter is where I always head when I get to go to trade shows, for just that reason. And that is where I met Marilyn Rising, whose RisingRoller is one of those “why didn’t I think of that?” products. It looks like a suitcase, but it’s a laundry hamper on wheels. Side pockets are big enough for detergent bottles. A smart zippered envelope on the underside of the lid lets you stow change or a laundry swipe card. Best of all, you can keep all your laundry gear, including icky dirty clothes, in one tidy package, making your partner happy and ensuring that you never drag to the laundry room without the dryer sheets. 

Rising did what so many women do: she started a small company on the strength of one good idea. She doesn’t have a platoon of employees: she staffed her Housewares Show booth herself.  And what’s wrong with that, you ask? What’s wrong with a small business owner aiming to support herself and her family? Is it really so wrong if she doesn’t want to take over the world?

I’ve reported before about efforts that think that women want to aim higher. Don’t just try to replace your own corporate income with your company, goes the thinking. Strive to create jobs! I agree with Astia that with some additional connections and modeling, women entrepreneurs can launch fast-growth, wealth-building companies.

The usual arguments for womens’ supposed lack of ambition is lack of capital; their preference to pace the business with their other responsibilities, typically family; and, more generically, a general assumption that women’s egos are better scaled to reasonable growth.  Do those same factors apply to most new startups? Because according to a new study from the Ewing Kauffman Foundation, the current crop of start-ups looks just like the typical woman-owned small business: employs mainly its owner.

“Since it began, the recession has triggered annual declines in the rate of employer enterprise births,” said Carl Schramm, president and CEO of the Kauffman Foundation. “Far too many founders are choosing jobless entrepreneurship, preferring to remain self-employed or to avoid assuming the economic responsibility of hiring employees. This trend, if it continues, could have both short- and long-term impacts on economic growth and job creation.”

But, wait: It turns out that most start-ups are actually exercises in sel-employment. Economist Ying Lowery analyzed Small Business Administration data and found that new firms in 2008 created two million firms without employees –i.e., self-employment — and 300,000 firms with employees.  And that was in 2008, just before the recession started.

Maybe the current crop of entrepreneurs doesn’t have any more access to capital than women have had historically. Maybe there’s a new kind of entrepreneurship emerging from the rubble of the Great Recession. Maybe it’s time to rethink the traditional yardsticks of success.

What if Marilyn Rising wants to settle in and just sell her rolling hamper, and that makes her very comfortable, financially. Maybe she keeps her day job and saves all the RisingRoller income for her retirement, making her financially independent. Maybe her blood pressure drops because she’s able to work out her entrepreneurial urges on a satisfying project that pulls in extra income. Does that mean that her venture wasn’t worth it? Money isn’t the only marker of success. Is it?
Image courtesy of Morguefile contributor alvimann.

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