Voice of the Restaurant Industry
I'm on a bit of a food+technology discovery tour to better understand the buzz on what is new for the foodservice industry; the why and the why now. As a start-up entrepreneur, I am fascinated by what drives someone to want to be an entrepreneur, or even a food and/or tech entrepreneur. One would think that will all the buzz around start-ups these days that the number of new companies being formed would also be up. But, not so fast.
According to a quarterly survey from Challenger, Gray & Christmas, 2011 had the lowest start-up rate in the 11 years since the survey began. Over the last two quarters of last year, on average just 3.2% of jobless managers and executives decided to start their own businesses, down by nearly half from the same period in 2010. The first two quarters of the year, 3.3% pursued entrepreneurship. The start-up rate hit an all-time low in the first quarter of the year, at 2.5%, the survey found. According to John Challenger, chief executive officer of Challenger, Gray & Christmas, it was not "a very inviting environment for would-be entrepreneurs". The survey compares 2011's rates to the 2001 dot.com collapse. Even in that environment, an average of 8% of job seekers still pursued entrepreneurship. Over the past two years, the average rate for start-ups is 3.9%, less than half of that 2001 average, the survey said.
But, I wonder. Did the survey take into consideration the difference between a product being developed by a entrepreneur(s) and a legal business? Maybe start-up companies are fewer in number, assuming a "company" is one with a tax ID and perhaps a separate bank account. But, what I see are hundreds of start-up entrepreneurs pounding away on keyboards attached to expensive headphones at co-working habitats from Palo Alto to Tribeca. A successful product launch may or may not require that a new company even be formed. But, an unsuccessful product does not a business make, eh! Maybe and maybe not. You know the saying...if at first you don't success, try try, try, try... These co-working habitats are full of smart, fledgling visionaries of all ages willing to take some risk. Not everyone is hell-bent on taking on Twitter. Most, in fact are just trying to replace income and be more in control of their lives...balance time and money. They consult, use savings or find seed capital from friends and family members to give them a shot, and buy some time. And, why not. Starting up a project that may become a product/service could become a bona fide start-up (maybe even counted by Mr. Challenger) is easier to launch and less expensive than ever (until legal fees add an average of $23,000 to any real start-up). I started FohBoh four years ago on a laptop at Starbucks using MS Word, a white-label social network template for our original fohboh.com community and a logo designed by an artist living in Leeds, England who won the $500 bid. That was four years ago. We started as a project that became a product before we became a business that required a legal entity to be, I guess, counted.
Now, there are so many tools, free API's, $100 consultants that can design a business card or build a website in India. You can buy a Groupon Clone for $500 and be in business in three days for under $750. There is virtually no risk and nothing but upside when it's just you, an idea, a laptop, a DSL connection, a cell phone, and a collaborative co-working space for just $50 a month. The only real risk is time. You can still send out resumes as a "Plan C" while networking with others smart self-propelled and directed entrepreneurs. You see, Plan "B" is your first Pivot when you recognize that a new opportunity has more potential than the one you are working on.
I have to tell you, co-working spaces are much different and more fun than what the pioneers offered the late 1990's, Web 1.0 incubators and accelerators. They are really a great way to start with a ton of benefits and I wish they were around when I started FohBoh.
The Amenities: The level of service provided by a co-working company will be a distinguishing factor. The better ones provide:
The "Coworkers": The best co-working communities attract a diverse set of fun, interesting, and creative people who are also quite serious about building their own small business. The network and referral effect of co-working can be considerable.
I think this is a trend that will continue and begin to segment into relevant verticals...hmmm... FohBohLabs, a co-working space for food+tech innovation, where restaurateurs can plan a new concept, write a business plan, test recipes in the commercial kitchen, meet and present to investors and gather local influencers long before a restaurant even opens. And, where tech entrepreneurs can collaborate with real operators on solving real food+tech problems in a collaborative offline foodservice community. Seems like a natural extension of FohBoh, the online community. What do you think?