For San Diego's young business leaders, the current recession is the first economic downturn they've experienced while in charge. So perhaps it's youthful optimism or just a case of not knowing enough to be afraid that's making so many of them so positive.
At a recent Daily Transcript roundtable discussion with winners of this paper's Young Influential awards, young rising stars in the local business community said tough times have forced them to improve their companies. They're constantly on the lookout for advantages and opportunities, and for new innovations in their fields. Overall, they have a good outlook on the future.
"The recession effect forced us to become a lot more nimble," said Yukon Palmer, president and founder of the fleet tracking company Field Technologies. "Going into '07, our product was actually focused more on the construction industry, so we targeted the construction industry with our application.
"When that market tanked, it really forced us to look at other options. What we did was we decided to focus more on service-type companies … Our sales went up 90 percent in '08."
Palmer acknowledged that sales eventually decreased and leveled off, but he saw being forced to evaluate his business as a good thing.
Jim Navarra, director of marketing for Jerome's Furniture, agreed. He said the retail furniture business is something of a bellwether on the economy, since people put off buying couches when times are tough, but it might be the first thing they buy when jobs and income return. So Jerome's has suffered in the downturn, but he said it has made them smarter.
"We've never been a more well put together and, I would say, lean company," Navarra said. "The market has really forced us to constantly try new things and reinvent ourselves."
Most of the companies represented by the Young Influential winners are small, and those gathered at the roundtable acknowledged that helps them. It's easier to change the direction of a business with five employees than one with 5,000. But they also shared a belief that the recession was a market correction in more ways than one. These business leaders agreed that not only had some companies become bloated and inefficient in recent years, but many had also ceased to make necessary products and services.
"Maybe America forgot about innovation for a little bit and started just kind of tooling around with what they had already, which is why they made the derivatives and the bad loans," said Erik Groset, president and co-founder of Digital Group Audio, which makes portable sound systems. "It just makes me think, there's always a better way to do something.
"If I'm 90 years old and there's still tennis balls on the bottom of my walker, then the world has done something wrong," he added with a laugh.
Accepting change was a theme that ran through the roundtable conversation. Most of the Young Influential winners accepted that an economic recovery this time around might not mean that everything simply returns to normal. A combination of the recession and new technology may permanently alter the way companies get financing, manage employees and generally do business with each other.
"I've been involved in the venture (capital) community for a long time and I get a lot of questions about when is it coming back to what it was," said William Molloie, a partner at San Diego's PricewaterhouseCoopers office. "I don't think it's ever going to come back to what it was because everyone's learned a lot from what we've experienced."
Malcolm Davies, branch owner of the wealth management company Opes Advisors, said many companies have learned the hard way that they have to diversify. It's too dangerous to rely on one specific sector.
Jeff Daley, president of JR Daley Construction, said his company has started to blend his residential and commercial construction factions, which used to be rigidly separated. He also said he's picked up much more government work than he used to.
"I've had to really go out and expand, see where can I make money," Daley said. "You really just have to be creative."
There are some parts of the stagnant economy that are getting tiresome, the Young Influential winners said. Capital and credit still aren't flowing as readily as it has to for companies to start and grow. There are some companies that have money to sign a contract with businesses like Reid Carr's Red Door Interactive, a marketing firm, but they're holding back. Carr said he would like to see more people have the foresight to realize making moves now will make them stronger in the future.
There is still uncertainty out there, and that can be a very frightening thing in the business world. But those gathered at The Daily Transcript roundtable embraced it. They said whoever survived the recession and the "new normal" that follows will be better, stronger companies for it. While it's been a difficult few years, they agreed it's made them more creative business leaders and better at evaluating what they do and don't need.
"I think the economic times that we're in right now present nothing more than a fantastic opportunity to create a culture," said Christophe Schilling, president and chief executive of Genomatica. "Not only a culture for a city like this, but a culture within our companies."
Steve Bond, Executive Vice President, TAG
Malcolm Davies, Branch Owner, Opes Advisors
Reid Carr, President, Red Door Interactive
Yukon Palmer, President & Founder, Field Technologies
Zeynep Ilgaz President/CEO, Confirm BioSciences
Keith Jones, Principal/Chief Operating Officer, Ace Parking
Jeff Daley, President, JR Daley Construction
Erik Groset, President/Co-Founder, Digital Group Audio
Jason Severson, Vice President/Branch Manager, California Bank & Trust
Joshua Weinstein, Managing Partner, AMSOLAR Corp.
Joshua Rychak, CSO, Targeson
William Molloie, Partner, San Diego Life Science/Pharma Practice Leader, PricewaterhouseCoopers
Jim Navarra, Director of Marketing, Jerome's Furniture
Christophe Schilling, CEO, Genomatica
Send your comments to Elizabeth.Malloy@sddt.com