Posts tagged as:

economy

While they’re all standing still…

by Andrew on October 13, 2008

I’ve been a bit lax with the posting again, but I’m trying. Continuing with the theme where I left off last time, starting companies in the downturn (likely to be a recession), the last time we talked the worlds markets were in turmoil, the banks had stopped lending money to us and to each other. Things have continued and are even worse two weeks on.

Now some would say is the time to tighten belts and budgets, for prudence sake. At least that’s what everyone else is doing, and what we’re doing at home to be fair. It’s cheaper shopping, soups and casseroles for the winter. Many businesses are reacting the same, I’ve heard it from them and so have you. Even businesses that have nothing to do with the finacial or property markets are tightening their budgets, and feeling or causing the pinch to be felt.

Is that good news for the nimble small business? Like every other news, yes. Small businesses face unique challenges their larger competitors don’t but they have one major advantage - they can move and react faster.

Don’t get me wrong, I’m not suggesting anyone should go on a spending spree. But neither am I suggesting that now is a time to be completely miserly either. What I am suggesting is that while your larger competitors, or even competitors of similar sizes are worrying about the future and cutting back their development efforts; or cutting back their staff, salaries and benefits. It’s a great time for you to make the leap to the next level, and come out ahead when this is all over- because it will eventually end, one way or another.

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Up in the downturn

by Andrew on October 1, 2008

I think it’s clear now, despite all the best hopes of an easy ride, that the economy has gone to shit. I also think it’s clear that no matter how far you try to bury your head in the sand, it’s affecting tech and other industries now. The knock on effect has a arrived and the inability of some to get operating credit as well as the fear of not being able to get credit if they might need it has lead to some belt tightening already, and there is more of that to come.

Maybe it’s a little cynical of me, but I think that some consumer websites which are lean and well capitalised must be liking the idea that people are going to be out of work. I mean without their boss bothering them to get off facebook and do some work - they can just do that all day, can’t they?

Really though, I think this time around the Internet is probably one of the better placed industries. We’ll feel it less and later than others and we’ll come out of it better off and earlier than some. Big ticket items are going to be the first to go, houses and cars are already down and falling fast. Holidays are out, entertainment and going out is suffering and it’s bound to get worse. That’s going to leave people with more time to waste, at home in front of their TVs and in front of their computers.

When confidence and spending starts to rise again, we’ll start to see people with a little money chasing bargains with time on their hands - isn’t that what internet shopping is all about?

The core fact of the matter is the economy is in the shitter because of banks - there is nothing fundamentally wrong with tech companies today. It’s not anything like the previous bust, it’s not a correction reigning in stupid valuations for companies with no clear path to revenue let alone profit.

Is it a good time to start a company though? That depends on how much if any investment you need. If you can bootstrap, and you should, then it’s a great time. If you’re going to need to find investment to get your idea off the ground, you’ll have a hard time with it. Until we can see the light at the end of the tunnel, and we’re sure it’s the end of tunnel investors are all going to assume it’s just a train.

A bit latter than normal, sorry about that. I’m really trying to maintain the post a day thing and I’ve been scheduling them in advance - I didn’t get a chance to get one scheduled for today so it had to wait till work was out of the way. I’ll endeavour to try harder. ;)

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