For a Startup the Worst of Times or the Best of Times?

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

Charles Dickens, A Tale of Two Cities

A photograph of an engraving in The Writings o...
“The Sea Rises” via Wikipedia

Is right now, with the global economy a daily story of disaster and fear, a good time for a startup company?

My hunch is that, if I asked around, the more common response would be that it is a bad time. Even a very bad time.

Companies and individuals are tightening their belts, people are being laid off, credit is tight. Plenty of reasons to sit tight and not try to launch something new.

My friend and unquenchable entrepreneur Mick Liubinskas clearly thinks that, for the web industry specifically, this is not just an ok time to start a new business but actually “the right time”, as he explains in the current issue of Anthill magazine. For one thing, he says, it’s easier to hire the stars you want on your team. And the money? There is money around, he says, even now:

Yes, there’s less silly money, less private equity, less from family, friends and fools, but it’s there. Maybe it will take longer, maybe you’ll have to work harder, maybe you’ll get a bit less – but it’s there.

On the same topic, Zoli Erdos in So Is It a Good Time or a Bad Time to Found a Startup After All? links to posts arguing against and for this being a good time for a startup and gives his own perspective.

One aspect of all this that struck me on reading these posts was that they are set in the Australian context (Liubinskas) or the US one (Erdos and others quoted by him). It would be interesting to know how this issue would be looked at – or whether it would be looked at – in, say, China, where the economy has certainly slowed but is still growing.

If Western entrepreneurs take time out now, will they come back in several months (years?) time when the economy will hopefully have become more stable and back into growth mode and find someone from China, for instance, has eaten their lunch?

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5 thoughts on “For a Startup the Worst of Times or the Best of Times?”

  1. I think it really depends on what industry you are in. In times like these, it might not be the best time to do luxury goods, but when the economy is bad, the demand for alternate income opportunities go up.

    People are going to continue to buy. They all have 24 hours, its just a matter of where they spend their time on.

  2. It is a perfect time for relevant start-ups. With the astonishing proliferation of new, and inexpensive tools, available for viral presentations of your product or service and a need for fresh, and innovative enterprises the time could not be better for a start-up.

  3. Nice intro Des. I agree that a lot depends on what you’re starting and where but I think that the how may be more relevant and may make the what and where less important. What I mean by this is if you start any new business and focus on highly satisfying a segment so well that the value is worth paying for then it’s a great time to start. Of course if you’re not doing this at any time then it’s not a great time to start, but during boom times this often seems less important.

  4. Kian – how do you see the situation in Singapore? I haven’t picked up on how the economic situation is impacting there but am interested to know whether you see the economic climate globally as having any impact on innovation in your part of the world.

  5. @Lonnie Is there any particular nuance for China? Or do you see those principles applying generally?

    @Mick I’d be interested to know what other feedback you might have had on your Anthill article – positive? negative?

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