Mike Masnick of Techdirt

I’ve been reading Jeffrey Rothfeder’s book McIlhenny’s Gold, which details the history of the family and company behind the well known Tabasco Sauce you’ve probably used many times in your life.  It’s a fascinating book for business buffs, in part because the McIlhenny family seems to do almost everything wrong based on traditional business planning, and yet continues to succeed at a level beyond pretty much anyone’s expectations.

What may be most interesting is how certain events early in the life of McIlhenny’s company seem to parallel the financial crisis of today.  In 1873, just a few years after the Tabasco sauce business had been started (and was still, by any definition, a “small business”), there was an economic collapse.  read more

There are plenty of good reasons for small businesses to be worried or nervous about the financial tumult going on all around us these days, But as many of us here have been pointing out, there’s still plenty of opportunity out there. The trick is finding it. One important trick that I’ve found to be useful is to evaluate two key things in a market: what’s scarce and what’s abundant — and then learn how to leverage what’s abundant to make something scarce more valuable.

So, for example, in strong economic periods, money — in the form of investment capital or loans — is often “abundant.” Meaning that it’s a good time to raise or borrow money, knowing that it can be used to profitably invest in the business, to grow value and sell something.

However, in tough economic times, when the money dries up, some people get worried and assume that if money is scarce, so are most other business opportunities. Nothing could be further from the truth. read more

Earlier this week, over on Techdirt, I wrote up a post about the financial crisis and how it might impact the tech industry. We received multiple requests for more posts along those lines — and American Express has decided to help foster the discussion. This post is being posted both here on American Express’ Open Forum blog and over on Techdirt. Also, more importantly, AmEx is sponsoring a Techdirt Insight Community Case to facilitate a larger conversation about how this impacts small businesses, and what they can do during this crisis. If you’re a small business owner concerned about the crisis, one way to make a little extra money is to take part. Sign up here to provide your own analysis. You can also comment here, but if you want to earn some money, you need to sign up and submit your insights as a member of the Insight Community. So, now let’s kick off a discussion on how the financial crisis might impact the wider economy, with a special look at the small business market.

Getting beyond Wall Street

I discussed some of that in the original post, but many people are still having trouble seeing how this crisis spreads beyond Wall Street financial firms (or, in some cases, their own stock portfolios). There are still plenty of people screaming out that these financial firms need to be punished or done away with completely, without any recognition of how that might flow through the rest of the economy. The New York Times has an excellent writeup, noting that people said the same thing as the Great Depression was happening, as well — again, not realizing that destruction on Wall Street can flow through the rest of the economy. read more