3 Ways Entrepreneurs Help the Economy

[November 17-23], the world’s largest celebration of the innovators and job creators who launch startups bringing ideas to life, driving economic growth and expanding human welfare.

An economist and an entrepreneur are walking down the street. The entrepreneur points, “Hey, there’s a $20 bill on the sidewalk!” The economist says, “That’s impossible – if it were really a $20 bill, it would have been picked up by now.” The entrepreneur leans down picks up the $20 bill and says goodbye to the economist. She sits on a bench, pulls out the $20 and ponders what she’ll do with the money. She remembers what her mom told her, “Yours is not to reason why, take the money and multiply!” So, instead of buying a latte, or putting it into a 1% Certificate of Deposit (CD) she takes her money and invests it into her business. She’s an entrepreneur; she knows, she’s got the ideas, skills and connections to turn that $20 into $25 – a 25% return, much better than that 1% CD, and much better than a latte.
In essence that’s what entrepreneurs do, they look for these $20 bills on the sidewalk, pick them up and try to multiply them. They are the lifeblood of capitalism and the world economy. If you are an entrepreneur, I applaud you, and if you aren’t – well I suggest you go hitch your wagon to one with a good idea and help him/her [even if you work in corporate, you’re still working for an entrepreneur] – help the economy.

Here are three ways entrepreneurs help the economy

1. Participation – The more people actively participate in business decisions and benefit from their results, the stronger and more efficient the economy becomes. Participation makes money change hands frequently and it’s a good thing. It causes inflation, which in moderation is also good since after all, don’t most people like to get a pay raise each year? Entrepreneurs understand this and work hard to make more money this year than last year. They know to choose to work on projects that have the best chance of multiplying investors’ money.
2. Innovation – New exciting ideas help the economy. Three entrepreneurs started Airbnb in 2008, and this year Fast Company named Airbnb one of the most innovative companies of 2014. Airbnb is set to generate $250 million in revenues and doesn’t own a single hotel. A simple idea and innovation in the way they designed the site and made the rental process one in which both homeowners and guests are reviewed!
3. Market Creation / Expansion – When an entrepreneur thinks of a market they include the Capital Market. Traditionally, they think, “Where can I get the funding for this innovative business idea and how much will it cost? Can my business idea make the investor more money than a 1% yielding CD or an investment in Apple stock?” Enter crowdfunding, which has taken the usual investment decision and turned it upside down. With a savvy crowdfunding campaign, an entrepreneur can raise real money from folks who are active stakeholders in the idea’s success. Two interesting crowdfunding platforms are: Plum Alley founded by Deborah Jackson in 2012 “to increase the economic strength of female founded companies and to provide greater access to capital.” And Seed & Spark founded by Emily Best “to make a contribution to the truly independent community in which she would like to make moving pictures.”

The world is rapidly changing, and new entrepreneurs and their supporters want to see innovation and new markets change the world

Today’s modern obligation for everyone to participate in the entrepreneurial process, either as founders of organizations or participants in helping fund businesses, does not have to be a burden. When people support one another in fulfilling beneficial visions, we all move forward. Find support! Give support! Get involved!

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This blog was contributed by Liz Lemesevski, founder of Money Native. She is passionate about creating an everyday, forward-thinking, fully participating San Diego Economic Region. With an MBA in Finance from Fordham University and a BS in Finance and French from Rutgers University, Liz’s founded Money Native out of her love of language and belief that individuals and organizations need to know and practice money vocabulary and concepts to be profitable. Money Native aims to grow organizations by managing financial risks and rewards and helping the organizations become attractive to long-term investors or donors.