Capitalizing on a Declining Market

An economic downturn in an ecosystem due to the decline of a primary employer or industry can create huge new opportunities for entrepreneurs with vision, will, and the ability to act quickly.

The other day I was looking at this picture of a tree growing out of an old rotten log. The image captured a discussion I was having with a fellow entrepreneur about the hay-day of entrepreneurship in our local ecosystem.

In the forest, the rotting trunk of a fallen tree feeds the growth of new trees by slowly releasing its stored up nutrients. The new trees are well-positioned by being situated near a nutrient-rich source on the forest floor and below a newly created gap in the canopy above to let in life-giving sunlight.

My local ecosystem was once dominated by the storage division of the premier minicomputer company, Digital Equipment Corporation (DEC). However, as the minicomputer gave way to the Personal Computer, DEC began to contract. The contraction released experienced managers and engineers into the local ecosystem with some seed money from severance packages.

For the several years that followed, many new businesses sprang up that were founded by former DEC employees. I was one of them. Freed from the shackles of a large rotting corporation, these new businesses were fueled by the stored-up nutrients from years of working at DEC. These businesses grew rapidly and quickly filled the gaps, taking advantage of the sunlight created in the opening of the canopy as DEC’s former customers took advantage of new offers from these new start-up businesses.

The metaphor of a rotting tree, therefore, conjures up the message that the collapse of a business or industry does not have to be a crisis. It actually represents an opportunity for entrepreneurs with vision, will, and ability to act quickly to take advantage of the nutrient-rich opportunity presented to them. Failure to react quickly may mean a lost opportunity as the window of sunlight rapidly closes.

What looming economic downturn are you prepared to capitalize on?