Blake Borgeson, in blog form

suspected facts. validated opinions.

Fred Wilson on startups in the downturn: batten down the hatches

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Fred Wilson, partner at Union Square Ventures, backer of Twitter et al, speaking mostly about the venture-backed startup world, examines some quotes from vcs floating around in the news concerning the effects of the current economic downturn. It’s clear that they’re taking it pretty seriously, even for innovative internet startups. To quote him,

in my mind, the single most important thing is not revenue in a time
like this. The most important thing is cost structure. Thomas Cole says
“smart companies are battening down the hatches”. That’s right.

I think it’s worth digesting all those comments, especially if you’re running a startup, and especially if that startup is bootstrapped. A downturn isn’t the time to throw in the towel for a bootstrapper. In fact, it can be a great time to start a company–the big guys are cinching up for the cold winter, which gives you some time to get in there and figure out the market first. It just makes you stay leaner, which means in the end you could emerge as a stronger, more efficient, and more profitable company. You just have to make it through the rough patch to see the sun on the other side.

Written by blakeweb

April 2, 2008 at 10:45 pm

Posted in startups

Tagged with , ,

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