New York Entrepreneur Week is a semiannual event for entrepreneurs of all experience levels to hear from industry experts, pitch their ideas and meet potential business parters and investors. We attended the first day of the 5-day event, which is being held at Scholastic’s headquarters in SoHo and runs through November 12. The speakers who came prepared to tell inspiring stories were met with loaded questions from the entrepreneurs in the audience. Their candid responses revealed the truth about starting a business during a recession:
The truth about choosing the right business: Glenn Hodgson (right), founder of Free Fall Works and one of the conference panelists, is a professional skydiver – a profession that is often met with skepticism and is not scalable because it rests on his continued ability to jump out of a plane. Still, he attributes his success to his dedication to his sport. “Whatever you choose, be good at it,” he said. The secret ingredients are “timing, knowledge and work,” said Hodgson, and “the harder we work, the luckier we get.”
Also on the panel was Milan Chakraborty(left), founder of Attic Light Films, who put it this way: “You can’t be an unsuccessful skydiver for long.”
The truth about outsourcing: Just because a small business is hiring, doesn’t mean the pay is going to be great. Serena Walker(right) founder of Adventure Society and My Freedom Formula had a full-time day job while she built Adventure Society and didn’t quit until three years later, when she had worked out her business plan. The entrepreneur hit a sore spot with the audience when she revealed that to keep costs down she funnels customer service jobs out of New York to “stay-at-home moms” in other states who can afford to work for less – at an average of $6 – $8 per hour.
In her defense, Hodgson brought up an interesting point: the high unemployment rate is lowering salary expectations. But “no one is putting a gun to someone’s head and saying, ‘you have to work for me,'” he said. When the demand for labor exceeds the supply, employees will have more leverage. Said Hodgson: “the market will take care of itself.”
The truth about exit strategies: Money Stu Strumwasser(right) president and CEO of Snow Beverages said “a lot of guys are looking for a 100x return that doesn’t exist.” With Snow, he said, “we’d be thrilled with a 20x return.”
Strumwasser will be putting his healthy soda on the shelves at Duane Reade, but he said that innovative consumer product startups like his should consider selling out to a larger competitor, which in his case are behemoth consumer brands like Coke and Pepsi. “They can’t invent themselves out of a paper bag,” he said, but they have big advertising budgets and are “there to protect value, not create value.” Don’t get him wrong – “they’re a lot smarter,” he said, “but they have no reason to suffer. We, the entrepreneurs, are the minor leagues.”