Recession or Opportunity?

For young entrepreneurs who launched businesses in the booming markets of the past few years, the Wall Street meltdown presents their first real economic crisis. So are they worried? How will they cope? The members of our 30 Under 30 list open up about their fears, where they see opportunity, and what they would do to fix the economy.

The recent meltdown in the financial market and plans for a federal bailout has many seasoned business owners reliving grim memories of past recessions and hard-fought battles with tough economic times.

Yet, many younger entrepreneurs are heading into unfamiliar territory. Studies have shown that as a group, 20-something business owners tend to be more flexible than their older competitors, adapting quickly to change -- when they're not outright driving it. Without the added burden of mortgage payments, children, or other financial obligations, many are able to take the kinds of risks needed to come out ahead in a crisis.

That's not say their stamina, ingenuity, and pocketbooks won't be tested as the economic impact spreads, prompting consumers to curb spending and lenders to tighten credit. How will their businesses be impacted? How will they cope?

We put these and other questions to members of this year's 30 Under 30, Inc.com's annual ranking of the nation's coolest young entrepreneurs. Here's what they had to say about the mess on Wall Street.

Are you worried?

Aaron Hall, 29, CEO of Borrego Solar System, an El Cajun, Calif.-based solar power company: Yes and no. I am worried as any slowdown in the economy is bad news, particularly a tightening of liquidity in the capital markets. When people and businesses are struggling, it is less likely that they will spend, particularly on something they perceive as not absolutely necessary. In addition, we are already seeing our bank tighten down. Fast-growing businesses often don't have the best financial ratios, so we may have less access to bank debt, which can stymie our growth potential. On the other hand, now is the time for solar. What this economy needs is to decrease our energy dependence on oil.

Claire Chambers, 28, founder of Journelle, a New York-based lingerie shop: I think anything that affects New York -- our primary market, for the moment -- is a big concern. I'm making sure we're taking on fewer risks than usual, and being a little more careful than usual with cash flow, as we see how it will affect us.

Omar Soliman, 27, co-founder of College Hunks Hauling Junk, a Tampa, Fla.-based junk removal firm: As an American, regardless of being a business owner or not, I think it is hard not to worry about the current state of the U.S. market. However, peaks and valleys are part of the natural progression of any economy. Right now, we are obviously in a valley, but I am very confident in the resiliency of this country. We tend to learn from our mistakes and bounce back stronger than before.

Rob Van Etten, 28, founder of Brighton Cromwell, a Randolph, N.J.-based supply chain management firm: Yes. Anytime it becomes more difficult to borrow it makes it more difficult for companies to grow. Anytime we start to question the strength of our financial system we know there is a problem.

Stephanie Goldman, 26, co-founder of Family Creations, a Woodland Hills, Calif.-based egg donor organization: As an American, I think you have to be worried about the financial crisis. People are loosing their homes, jobs, equity. It is a very difficult time for our economy, however hopefully with this treasury plan that should be voted on this week, liquidity should ease up and the economy will hopefully recover.

Matt Mullenweg, 24, founder of Automattic, a San Francisco-based software firm: Of course, it's the worst financial crisis in my lifetime. But with regards to our business and assets, it doesn't change any of the fundamentals and we have little or no exposure to financial companies. It does make me glad we made a decision to put our cash into the safest securities possible -- T-bills -- rather than try to squeeze out a few extra basis points.

How would you describe the current business climate in your industry?

Hall: Our industry is skyrocketing. There is a lot of consolidation and investment in the space. There is one threat to our medium-term growth and that is if the extension of the federal tax credits for solar do not get extended this year, which really means this month.

Van Etten: Currently, a lot of companies are having both layoffs and hiring freezes. In my industry, there is much uncertainty in how a change in administration will affect military spending. It is both a cost cutting game and a waiting game.

Soliman: Fortunately, the junk-removal industry is not as affected by the market crisis as some other businesses are. Benjamin Franklin once said "Nothing is certain but death and taxes." I would have to add junk to that list.

Chambers: Wary. When buyers worry, so do manufacturers, and I think that reduces lingerie designers' ability to take risks and create items that really catch the consumer's eye. From consumers, while we haven't seen overall sales suffer too much, we have seen a drop-off in big purchases in the last week, quite remarkably, as people worry about what will happen locally.

Goldman: Our industry has been seemingly unaffected by the economic slump. There are two aspects of our business plan. One is recruiting egg donors. Egg donors receive a sizeable fee per donation, so with a weak economic cycle, there are more women applying to become donors in hopes of supplementing their income. The second aspect is marketing to intended parents looking to use a donor. With a larger amount of egg donors, we have more options for intended parents to choose from.

Mullenweg: Good! More people are publishing online everyday and continue to choose WordPress to do so. Most consumer Internet start-ups like ours have products that are either free or low-cost, so things will have to get a lot worse for people to start thinking twice about spending one or two dollars a month.

Read more:

What You're Not Doing to Maximize Profit (But Should Be)

Redbox's Smart Move: What You Can Learn

What Makes a Company Resilient?

Sign-up for our Small Business Success Newsletter

Email Address: