The Recession-Era Entrepreneur
Economic necessity and the ease of social media create the perfect storm for a new crop of DIY businesses.
By Kathleen Richards
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- STEPHEN LOEWINSOHN
- Jeannine Komush says Etsy allowed her to start her jewelry business.
Kids typically fantasize about having fairy-tale adult lives. They imagine they'll become astronauts, veterinarians, presidents, ballerinas, superheroes, or reality-TV celebrities. And most parents don't go out of their way to quash those dreams, no matter how far-fetched they are. But few youngsters voice desires to become self-employed writing coaches, purveyors of homemade spicy jams, or part-time baristas who make jewelry on the side. Yet those could be more realistic aspirations, as a seemingly growing number of East Bay twenty- and thirtysomethings are doing just that in order to make ends meet.
Due to the economy, slim job prospects, and skyrocketing education costs, more and more young people are finding their fairy-tale careers beyond reach, or simply not on the horizon. As a result, many are supplementing their incomes — or banking entirely on the do-it-yourself route — by starting their own businesses, many within niche or specialized fields. While the Bay Area has always had a certain entrepreneurial spirit about it, these days it seems working stiffs are becoming their own bosses for more urgent financial reasons. And with the availability of online channels like Twitter,Facebook, Kickstarter, and Etsy, making those businesses financially solvent seems a more viable idea than ever before.
"People are doing lots of small things cobbling together a full living," saidLauren Venell, who teaches often sold-out DIY business classes atWorkshop in San Francisco. Venell said her enrollees are mostly creative types — designers, crafters, and illustrators — who want to launch their own endeavors. Many hope to start curatorial businesses that recommend products or hand-pick items to sell. Most of them are in their twenties and thirties, or semi-retirees in their sixties, with few in between, Venell noted. And, for whatever reason, the majority are women.
Venell acknowledges the Bay Area's entrepreneurial pedigree, but says she's seen a new trend of people being drawn to start their own businesses out of economic necessity: getting laid off from their jobs or having their work hours reduced. "It didn't used to be that way," she said. "It was much more deliberate a few years ago. And now ... they're doing it with a little less preparation."
Venell is among those who started a crafty side business not for monetary reasons, per se, but for fun. Nine years ago, she was teaching elementary school in the Bay Area when she began making kitschy plush toys in the shape of various meat cuts (pork chop, bacon, ham, etc.). Initially, she sold her Sweet Meats plush toys on the craft-fair circuit, but thanks to some fortuitous press (including from The New York Times), her products are now widely distributed through stores as far away as Germany and Spain, and on her web site. She has since parlayed her skills into consulting with small-business entrepreneurs and doing product development with toy companies. She also does the occasional prop design, marketing for tech companies, and helps to program the annual Conference of Creative Entrepreneurs, which launched in response to the high demand for her classes (this year's will be held August 5-7 in San Francisco). "I like that I have eight different things to do every day," said Venell. "It's never boring, but it also means you have to be really organized and work weekends. It's not for everyone."
As was the case with Venell, often entrepreneurs are already doing something creative alongside their nine-to-five jobs. When they lose their full-time gigs, hobbies become both prospective revenue sources and more fulfilling avenues of labor. That's exactly how it happened forDafna Kory. As a video editor, the 29-year-old Berkeley resident was accustomed to spending long hours behind the computer. But she wanted to break up the monotony and do something more physical, so a few years ago she began making jam — specifically, spicy jalapeño jam. She sold it informally to friends, neighbors, and at the SF Underground Market, an event designed for homemade-food producers who don't have proper licenses. So when the company Kory was working for closed its doors in 2009, she decided not to seek more video work but to pursue her hobby as a real business. "I've been wanting to do this jam stuff for a while," she said. "It gave me the opportunity I couldn't refuse."
Today, Kory says her entrepreneurial inclination is paying off. Her jam company, INNA Jam, is sold through her web site and at upscale food stores in Berkeley and Oakland, including Rick & Ann's Restaurant,Summer Kitchen Bake Shop, The Gardener, Berkeley Bowl West,Local 123 cafe, and Sacred Wheel cheese shop.
"It's been going amazing," gushed Kory, who delivers her jams by bicycle. "I have to say, it's way beyond what I expected because there's a lot of good jam in the Bay Area. I didn't think there was some big need for jam, but I'm glad I took it to the next level because it's been really well received." While she still supplements her income with occasional freelance video work, she says she hopes INNA Jam will fully support her next year (although, she admits, she said the same thing last year).
In Ali Lawrence's case, an injury led her to consider self-employment. Lawrence, who lives in Oakland, had been working in events services for a long time when she hurt her wrist in January of last year. "That sort of forced me out of something I didn't really want to be in anyway," she said.
Initially, Lawrence went about searching for a traditional line of work. She sent out her resume looking for an office job or something in the field of writing, which had long been her passion. (She got her MFA in Creative Writing from San Francisco State in 2007 and had published one book.) But her employment options were dismal. Soon she found herself applying for jobs she didn't even want and was "feeling horrible" that she wasn't getting calls back.
So, instead, she started a writing group. Then she began tutoring a friend's kid who was having trouble with his writing. She helped another friend with her business' web site. "Then a light bulb went off," Lawrence recalled. "There's a huge need for these services." She decided to officially offer her talents as a writing coach. By April, she was copywriting for a couple clients, and by summer she was working one-on-one with students. Things picked up relatively fast, she said.
Lawrence's decision to start her own business was partly spurred by the trend toward DIY employment: More and more of her peers are starting their own businesses and looking for low-cost help, especially as marketing via channels like Twitter and blogs has become crucial to survival. "I was having trouble finding the right job for me, so I had to create my own job basically," she said. "And now it's scary and stressful but it's amazing. I see so much potential."
It makes sense, really: Pursue jobs that employ skills you already enjoy and that come naturally to you, instead of trying to force an interest or skill to materialize. In many ways, this appears to be a generational trend. "I think a lot of people our age went a different route than our parents did," Lawrence said. "There's an overwhelming amount of options. We were raised to think we could do whatever we wanted to do. Here we are being spoiled brats, not having our perfect job. I can think of twenty people right now my age who are striking out on their own."
One might think that making spicy jam or crafting plush meat toys are occupations too specific to attract a large enough customer base to be sustainable, but Rich Stimbra says being hyper-specialized is an asset in this new era of entrepreneurship. "Back when you had the brick-and-mortar business, you had to appeal to as wide an audience as possible because people were just walking by," he said. "Now it's beneficial to be as specific as possible." Stimbra would know; he's launched several successful businesses over the years, all appealing to very specific audiences.
It started when the Walnut Creek-based comedian would work events for his boss at the San Francisco Comedy College. Often the events were marketed as "clean and sober," because his boss had been in recovery for 25 years. The rules of recovery require anonymity, so sober comedians were often just known as "Bill" or "Chuck." Booking them was thus next to impossible. So Stimbra started Recovery Comedy, which books clean-and-sober comedians all over the country at events like Alcoholics Anonymous and Narcotics Anonymous conventions. Calling it "recovery" without revealing which specific program they're in sidesteps the anonymous issue. "It's an untapped niche," said Stimbra, who also runs a company booking comedians for corporate events.
Key to Stimbra's success was his online marketing. He became somewhat of an expert in search engine optimization and social media like Facebook and Twitter, which led him to recently start a third endeavor: social media consulting.
Indeed, social media and other online platforms have meant lower barriers to entry into entrepreneurship. While Kory never used crowd-funding sites like Kickstarter, she solicited people via her e-mail newsletter to purchase subscriptions, which allowed her to raise a bulk amount of money as a sort of loan. Oakland jewelry designer and part-time barista Jeannine Komushstarted selling her designs (called Tangleweeds) through Etsy, an online DIY marketplace. "When I first started, I didn't have enough resources to start going to stores or going to craft fairs — and, frankly, I was too intimidated to do that," she said. "Etsy was less intimidating." Also through Etsy, Komush connected with stores who now carry her stuff. But over the last few years, competition among jewelry designers on Etsy has become fierce, she added, so these days about half of her business is made through craft fairs — also a highly competitive market for jewelry-makers. She still works part-time as a barista to make ends meet (and for the social interaction), but says she's close to making a living through her jewelry.
Oaklander Faben Alula (who, full disclosure, works at the Express as an account executive) uses Facebook to spread the word about the music shows she books at San Francisco club Mezzanine with her partner Al Williams. "We definitely go hard with social media marketing," said Alula about the tactics of her company, Never Dying Productions.
"I think nontraditional is traditional now," said writing coach Lawrence, referring to modern marketing outlets. "Anybody you talk to who is an entrepreneur is really relying on Facebook."
Even with networking groups and social media, however, the road for a new business can still be rough. "Ninety percent of new businesses fail, 80 percent in the first year," said Venell, matter-of-factly. "And mostly it's because people are unprepared." She says the ones who start their own businesses out of dire economic reasons are less likely to succeed than those who are truly dedicated to their work. But even many of the most passionate won't make it, either.
This is partially why Lawrence started a women's entrepreneurial group with some of her peers to address questions they were all running up against. "I was sort of leading with my instinct and intuition on this for the first part until I realized I had taken a step further in," said Lawrence. "I had no dialogue with anybody. That's when I reached out to someone else to start a women's business group to air out these things and figure these things out." Called Bizzy, the group meets once a month and stays in frequent contact via e-mail. They purposefully kept it small starting off (there are six members currently) but hope to open the group to others starting in June.
Joe Cha, who lives in Oakland, had been unemployed since 2008 when his friend asked him to work at his start-up creating an iPhone messaging app last November. The app never took off, unfortunately, but Cha says the market is ripe for such "bootstrap" companies. "It's not like a boom right now but it's kind of interesting for software companies," he said. "There's opportunities, more than before." And he agrees that social media plays a large role in that. "With Facebook, you don't need millions of dollars to get started. You just need a couple guys. The start-up cost is pretty low."
Now facing unemployment once again, Cha, who's also an artist, says he'll probably go the nine-to-five route, although he admits it won't be as fun. "If I had a good idea I would definitely try the start-up thing again," he said.
In other words, Cha — and many people like him — would rather do something fun and creative than follow a more traditional route, perhaps like the one they envisioned as a child. And regardless of whether their businesses are ultimately successful or not, the experience is likely to pay off. Says Venell: "It's one way to feel like you're moving forward, whether you're making money or not — usually not."
