Saras Sarasvathy Doesn’t Mind a Little Recession

Question: Is the recession good news for entrepreneurs?

Saras Sarasvathy:  Well, absolutely.  In fact, if we have to come off the recession who is going to get us out of it?   If entrepreneurs stay home and wait for the recession to end, right?   The worldview on entrepreneurship is what you do matters and if you don’t do anything it is not going to change. So when things don’t go well, it’s even more the time to act.  That’s part of the entrepreneurial worldview and this is something that seems very simple when you actually come to realize it, but it’s not intuitive to think about.  Now, there are lots of articles written and stories about companies that started during recession but one of the things people haven’t written about as much is the idea that there are more opportunities than there are problems.  For example, there are more opportunities today I would bet in sub-Saharan Africa than anyplace else just because that place needs so much because it’s simple economics that where does demand come from? It comes from needs, it comes from necessities, it comes from wants.  It comes from people who have problems and that’s were opportunities come from. 

I had a student from Nigeria who took a class with me in the first year and he had the same issue that a lot of my students have: “Oh, I would love to be an entrepreneur someday but you know, I don’t have any idea. I don’t think I’m the entrepreneur type”. And, by the time we finished the course and we had talked about this notion that ideas are a dime a dozen, opportunities are strewn everywhere, what makes something really a viable opportunity is you’re acting on it and you’re finding ways to kind of implement it.  By the time we were done with it I think he was ready to at least try something so he goes back to Nigeria during the holidays and then he comes back with a book of 20 ideas all of which he absolutely are doable and he wants to do now!  And so the problem became, you know, kind of what to do next or rather what not to do next because you cannot do all 20 at once.  So from a person who thought that he didn’t have an idea, that opportunities are rare, he suddenly realized that he could see a lot of opportunity, that he could see a lot of opportunities back home where everything was new.

I have kind of the same experience when I go back to India. Everything is new there in some ways and the excitement of development is exactly that.  That is a basic level of course if you are in the bottom billion or if you are really, really poor that you do not have food to eat, that’s a different story but the moment that we come out of that absolute basic necessity out of life, almost immediately life is filled with opportunities because now the human being has time to think and actually do something and human beings create things and human beings start wanting things which is a very good thing.  So, I do believe that the environment for opportunities has to be, if there is a measure of it, higher today during a recession than we when we had all the money floating around on Wall Street. And just to give you one example, one of the classic examples of a company that started during a recession is Sony. And, Sony decided during the recession in Japan and they started trying to make rice cookers. And it’s amazing apparently if you go to Sony headquarters today, they still have these steamers on the wall because that was, that was the original business model for the company.  So it goes to everything that we say A.  You can start a company like Sony during a recession and B.  You don’t need to know what the heck it’s going to be.  It could be a bunch of steaming baskets and it turns out to be something very different down the road. 

Recorded on: May 19, 2009

Crisis is another word for opportunity.

Live on Thursday: Learn innovation with 3-star Michelin chef Dominique Crenn

Dominique Crenn, the only female chef in America with three Michelin stars, joins Big Think Live this Thursday at 1pm ET.

Big Think LIVE

Add event to your calendar

AppleGoogleOffice 365OutlookOutlook.comYahoo

Keep reading Show less

A new minimoon is headed towards Earth, and it’s not natural

Astronomers spot an object heading into Earth orbit.

Credit: PHOTOCREO Michal Bednarek/Paitoon Pornsuksomboon/Shutterstock/Big Think
Surprising Science
  • Small objects such as asteroids get trapped for a time in Earth orbit, becoming "minimoons."
  • Minimoons are typically asteroids, but this one is something else.
  • The new minimoon may be part of an old rocket from the 1960s.
  • Keep reading Show less

    Can we resurrect the dead? Researchers catalogue potential future methods

    From cryonics to time travel, here are some of the (highly speculative) methods that might someday be used to bring people back to life.

    Credit: Pixabay
    Mind & Brain
    • Alexey Turchin and Maxim Chernyakov, researchers belonging to the transhumanism movement, wrote a paper outlining the main ways technology might someday make resurrection possible.
    • The methods are highly speculative, ranging from cryonics to digital reconstruction of individual personalities.
    • Surveys suggest most people would not choose to live forever if given the option.
    Keep reading Show less

    Airspeeder's ‘flying car’ racers to be shielded by virtual force-fields

    Welcome to the world's newest motorsport: manned multicopter races that exceed speeds of 100 mph.

    Credit: Airspeeder
    Technology & Innovation
    • Airspeeder is a company that aims to put on high-speed races featuring electric flying vehicles.
    • The so-called Speeders are able to fly at speeds of up to 120 mph.
    • The motorsport aims to help advance the electric vertical take-off and landing (eVTOL) sector, which could usher in the age of air taxis.
    Keep reading Show less

    The spread of ancient infectious diseases offers insight into COVID-19

    Archaeology clues us in on the dangers of letting viruses hang around.

    Credit: ImageFlow/ Shutterstock
    Surprising Science
    • A University of Otago researcher investigates the spread of disease in ancient Vietnam.
    • The infectious disease, yaws, has been with us for thousands of years with no known cure.
    • Using archaeology to investigate disease offers clues into modern-day pandemics.
    Keep reading Show less