Factoid

I think I’ve mentioned that for every post I actually publish I research and draft probably two or three others that never see the light of day for various reasons. The most important reason is that I just lose interest. Blog posts, at least my sort of blog posts, are essentially newspaper columns and not every idea fits into a newspaper column. There are other forms, i.e. articles, monographs, and books, and some ideas require treatment at greater length than can be comfortably accommodated by a blog post that is optimally less than 800 words long and maxes out at about 1,200 words.

At any rate I was researching a post that may or may not ever see the light of day and stumbled across something I found interesting. Of the present Fortune 500 companies more than half opened their doors, i.e. date their establishment birthdates during recessions or depressions.

It is not that more businesses are started during economic contractions. Historically, that is not the case.

It’s interesting to speculate why such a large percentage of Fortune 500 companies started up during economic downturns. One possibility is that the economy is like a forest. Small trees do not flourish in the shade of established, forest-spanning sequoias.

7 comments… add one
  • TastyBits Link

    During a downturn there are layoffs, and it is likely these companies were started by these unemployed employees. These companies may have a higher survival rate than others, and the overhead is probably low.

    This is just a guess.

  • jan Link

    I find that ‘factoid’ very informative, augmenting that old saying that when one door closes look for another to open. Down times often present unusual opportunities for those willing to look for them. For instance, in these days of high unemployment, my husband and I have noticed an unusually high spike in the start-ups of small cottage industries — individuals going out on their own and devising a service in order to survive.

    Another interesting stat is that on lists of the 400 most wealthy, only 2% make that list the next year, indicating the fluidity of rising and falling in this country.

  • Another interesting stat is that on lists of the 400 most wealthy, only 2% make that list the next year, indicating the fluidity of rising and falling in this country.

    I think you must have misremembered that statistic, jan. Maybe it’s the other way around. That I’d believe.

    I compared the Forbes 400 for 2011 with the Forbes 400 for 2010. 2% of 400 is 8. More than 8 people in the top 15 of the list for 2011 were in the top 15 of the list for 2010 therefore the turnover for the whole list is more than 2%.

  • jan Link

    Perhaps you’re right Dave. I ‘heard’ that stat, and was quite startled by it, at the time. Being in print, though, is far more valid. Do you have any links to such a list?

  • Forbes 400 2011
    Forbes 400 2010

    I also strongly suspect that the turnover is very high in the lowest echelons of that select list, e.g. I suspect that the 400th and 401st change places pretty regularly.

  • jan Link

    Thanks, Dave for the links. Your comment about the lower end of the list makes sense.

    In looking at Forbes, there is a pattern of age: old money, like oil, with an older age of the person; newer, younger industries, technology (facebook, google etc.), have younger billionaires. It’s not profound, just interesting.

  • steve Link

    I do think jan’s belief is informative. Too many people believe things that are just not true. Not the kinds of things over which there is disagreement or can be spun differently, but rather basic, non-disputable numbers. To be fair, this could just be an honest mistake, but I think it is one mor elikely made when it plays to one’s bias.

    Steve

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