Devin Chasanoff, a finance and accounting student at the Ross School of Business, graduated from the University last spring, entering one of the toughest job markets for a college graduate in recent history.

At the University he had studied to become an investment banker and had hoped to get a job right out of college. But after multiple interviews with recruiters from investment banks and consulting firms around the country, and not one offer in sight, he took an unpaid internship in New York City at Maxim Group — the investment banking firm he had interned with the previous summer. While the arrangement mirrored that of many of his B-school friends who were also having trouble lining up permanent jobs, Chasanoff was still disappointed.

“It hurt not to be able to find a job after putting in so much work, going to one of the most prestigious business schools in the country,” Chasanoff said

But just a week into the job, sitting in the company’s Chrysler Building office on the east side of Manhattan, Chasanoff thought of an idea that would pull the New York City native back to Ann Arbor.

His vision was to create a website — an event-based social networking site that would consolidate all of the information available to the diverse University of Michigan student body into one simple location.

“Essentially, what I wanted to do was pull all of the vibrant student life and campus community — student groups, student organizations, Greek life — into one place,” he said. “Pretty much everything you’d find at Festifall.”

He launched the site, TheNew2Do.com, in January and chronicled the development on his blog, TheStartupKid.com.

“This experience has been like nothing else in my life,” Chasanoff wrote on his blog. “It’s really the experience of a lifetime, and had I gotten a (job) offer, I never would have pursued this startup.”

Today, Chasanoff no longer considers his inability to find a job a set back. The recession, and the position it put him in, propelled him to innovation.

“I wasn’t happy with what I had,” he explained. “(The recession) presented this really big opportunity for me.”

Chasanoff’s experience isn’t unique. It illustrates a larger pattern of entrepreneurship induced by a failing economy. The company's beginnings sound like the stuff of movies: some space in an office building basement, a communal pot of money in the middle of the room, tables from IKEA thrown together and a BYOC policy — "bring your own chair." Without reliable job prospects, many people, including young college graduates, choose to take a chance with a business venture instead of working in a dead-end job.

According to Tim Faley, managing director of the University’s Zell Lurie Institute for Entrepreneurial Studies, areas now associated with entrepreneurism, like Silicon Valley, went through periods of economic erosion themselves. When these places realized the need for an alternative fiscal base, innovation soon followed and an entrepreneurial economy eventually came to replace their antiquated structures.

“A poor economy makes starting a company look a lot less risky,” Faley said. “If I have an entrepreneurial mindset and the secure corporate job doesn’t look that secure, then maybe I’m more likely to start a company. That’s where the economy really drives people to start new companies.”

Faley said Michigan’s traditional economic base — automotive manufacturing — originated from an entrepreneurial mindset. But following the cycle of innovation, the auto companies began to overlook the importance of continued ingenuity and Michigan’s population concentrated on industry jobs rather than entrepreneurship.

While this deterioration of Michigan’s automotive-based economy has been happening for years, the recent economic crisis has forced Michiganders to look toward a new economic base.

“The problem with Michigan is that the automotive industries would decline and people would say, ‘Oh, we need to do something differently,’ and then it would bounce back, and all of the new programs would get killed,” Faley explained. “We’re at the point now where people are saying there is a fundamental, permanent shift in the auto industry, and we have to develop an economy outside of that.”

Though the state has arguably been hit the worst by the nation-wide recession, Faley believes the downturn may be just the thing to put it at the forefront of the national recovery.

Business junior Lauren Leland, president of MPowered, a student organization that promotes and supports entrepreneurship at the University, noted that in the past, Michigan’s economy has never forced people to innovate because they had “steady, reliable jobs.”

“The economy has obviously brought a lot of hardships, but it’s a brilliant chance for people to innovate,” she said.