Educator (Associate Professor) / Entrepreneur / Leader of angel communities /
Entrepreneur in residence at PorterShed and BioExcel
You’ve practiced your deck.
Updated the financials.
Sweated through your clothes.
And presented the fruits of your labors in a conference room or coffee shop.
The VC looks up and smiles and says, ‘Good work, this is a nice boutique business.’
It’s a code that every entrepreneur fears. It’s the ‘he’s got a great personality’ comment when someone is trying to fix you up. It’s the ‘what a sweet outfit’ comment about a newborn.
Was there ever a death knell so profound? A rejection so complete? The cemetery gates creak open. All is lost when the money guy goes thumbs down. Damned with the faintest praise.
With the possible exception of the comment ‘this is a consulting business,’ nothing says thanks but no thanks more explicitly than being labeled a boutique business by a VC.
Translation: you might make a nice living off of it, but this is not a VC deal. It doesn’t scale like a VC deal. It will never return 10 or 20X. The market is too small. It doesn’t scale beyond Ireland. It’s a niche – or, worse, fashion – business. It’s overly dependent on you, your personality, your vision (in other words, if you get hit by a lorry, there’s no business).
Well, that was yesterday. Not that VCs won’t continue to say no, but Covid-19 has changed the game and. Suddenly, boutique is beautiful. Boutique is cool.
We’re in a new abnormal that’s going to last a while. And the changes that have been so profound in the last weeks will accelerate.
Every business model has been upended. Products will of needs be repriced (if a restaurant, or creche, or concert hall or airplane can handle only half the customers that it once did, what’s the impact on the value of the commodity, or our ability to pay?), work environments will be rethought, transportation will be rethought, entertainment will be at one or more removes. International trade and supply chains will be reconfigured. And the very notions of population density, personal mobility, the rules of sociability, and interpersonal communication will never be the same.
We can make out the tip of the iceberg when we read the business news. Debenham’s closing. JCPenny’s and J.Crew declaring bankruptcy. More disturbing, the high-flyers of the last decade are shuddering: Airbnb slashes employee count by 25%, Uber cuts 14% of its workforce, ClassPass halves its employee count, Sephora shrinks by more than 3,000. The US lost 33M jobs last month alone.
The greatest career dislocation since WWII is under way.
Which brings me back to boutique businesses. Yes, VCs will continue to invest in companies that can scale and provide outsized returns. And governments will have a role to play in helping tech companies face the new opportunities and challenges that we will face in the coming years. But for the majority of displaced workers – and for the economies of their regions and countries – we will have to find ways to spur small business – brick, click, or both – and help individuals fill the holes that are left in the economy (products and services), fill the retail and office spaces left empty, and fill the pockets of the millions who will been affected.
In other words, boutique business.
How do we accomplish this? Is it a national or regional effort? Likely both. Finding work for the able-bodied will feel more like the 1930s than anything else. Promoting new business development will expand beyond the entrepreneurial remit of current accelerators. Business models – and investment models – will be reframed. New incentives will be required. And as customers, or responsible citizens, it will be up to us to advocate for these new businesses, to invest in them, to purchase their products and promote them.
The good news: It’s an opportunity to renew interests in locality, heritage, indigenous crafts, quality, individuality, and personality. It’s time to express local pride by more than a rugby jumper, express status by more than a fancy logo, express individuality by personal investments in other people’s handiwork.
And there’s no shortage of talented people. And new tasks – read: businesses – that are waiting to be pursued. Smart cities and counties and countries are already starting to pick up the pieces and thinking about who we are and who we can be.