Wednesday, December 10, 2008

A wondeful time for start-ups

"What's he smoking?", you may ask, but the suggestion isn't as mad as it may sound. Yes, markets are down and yes people are nervous. But, large companies are pulling back behind the pallisades and there are some benefits to getting new businesses into the market today.

I was talking about this with a former colleague over lunch today. She is upbeat. And, when I came back to the office, I saw this interesting post at TechNation Australia. Blogger Mike Watkins highlights five reasons that this is a good time for start-ups:

  1. The talent pool is suddenly offering up a whole lot more choice to new businesses at much lower costs.
  2. There's less competition.
  3. Recession is the "fit farm" for new businesses - if you come out of the back end of this intact, you'll be in fighting form to benefit from the upturn which, as spring follows winter, will indeed come in due course, prophets of doom notwithstanding.
  4. What Watkins calls "real VCs": if somebody puts money into your business today, (a) you're damned lucky and (b) you know that they have to be really serious. The days of the 22 year old MBA deal flippers are over. Thank goodness.
  5. History - some of the world's great companies got their start in tough times. He cites Apple and Microsoft. A review of a book I was just looking at pointed out that Warren Buffet's father founded a brokerage in 1931.
So, there you have it: if you have ***** of steel, this may be the time to get your new business going. And you may be in luck. Your current employer may be getting ready to make this possible with a pink slip for Christmas.

1 comment:

Dan said...

I completely agree. My brother became a stock broker right after the 1987 crash and when things picked up years later, he was the guy people went to because he had experience. Real estate brokers are quiting in droves and so if someone gets into that business now, they will be the one raking it in during any eventual turnaround. I believe the same is true of most businesses and this is a generally accepted idea.