Robert, you're certainly watching the various canaries in the coal mines out there. I'm trying to remain hopeful, while trying to figure out the best way to re-tool the message and maximize efforts to serve potential and existing clients in a rough market.
I'm a huge fan of Open Innovation. I'm wondering if this might actually be a time period where crowdsourcing and innovation platforms could thrive, with the ranks of talented (recently laid off) freelancers swelling, and perhaps eager to pitch ideas and solutions to businesses that still need them. An inexpensive crowdsourcing platform might be just the medicine for some businesses and some freelancers. Thoughts?
Brian Roy
· 1 year ago
There is no question this is true. I've begun talking to partners (or potential partners) about M&A as well as partnership. Raising capital to keep my bootstrapped start up going - even though I have a solid business model and plan - isn't realistic. Given that I've shifted focus to generating revenue via partners with an eye on being acquired by one of those partners.
Artificial
· 1 year ago
This recession is artificial and won't last a quarter.
Many people will make huge mistakes because of that.
Just watch and learn.
Robert Scoble
· 1 year ago
Artificial: if you're right about that I'll lick your boots. All indicators coming in right now are telling me you're wrong, but that's what makes the world go around, isn't it?
Christopher Coulter
· 1 year ago
Well, I found something MORE annoying than tech bloggers blabbing about politics, them pining on economics.
When bubbles pop, it's not a bad thing, it's a good thing, never mind that Silicon Valleyfakespeak, of "consolidation".
Time up pony up, and blame your advertisers.
Robert Scoble
· 1 year ago
Jeff: well, if this really is deeper and longer than last time, there will be some very innovative things that come out of it. This blog started after the downturn started last time. Having time away from work to think certainly makes interesting things happen. Yes, entrepreneurs who have enough cash to last a few years are certainly thinking about what will happen to bring us out of a downturn.
Robert Scoble
· 1 year ago
Christopher: you were discredited often and early here. If you're so smart what are you going to do as your wedding business dries up?
Shafqat
· 1 year ago
I'm the cofounder of NewsCred. We're 100% bootstrapped, and have diversified our revenue stream in the past few weeks. We know that even with neglible burn rate, ad revenue won't cut it during a recession. We're also about to close an angel round to give us runway for 1.5 years. All of this has happened in the past few weeks.
Times are tough, but I'm really excited to be building a startup during these times. Let's do this!
However, I for one don't think us entrepreneurs should all panic, we should take a long herd look at our market and consider where the best place to "focus" our sales and marleting efforts in order to "sell" our way out of this position if we can...if you are twitter with no revenue streams yet then try and find some pronto or do as you say and find a big corporate partner/M&A or just be prudent and expand your runway to the next round.
I also suggest tuning all messages to customers to "value" and "revenue generation/cost reduction" and get your existing customers to generate more revenues for you too.
"...I’ve been talking with companies who have millions in monthly revenues who can’t get credit or funding to expand and they are seeing customers disappearing from the marketplace at the same time..."
Okay, is it just me, or does anyone else see something wrong with that statement?
ugh
· 1 year ago
ken:agreed
if youre losing customers why would somebody fund you. glad to see tech startups realize a blog story about your dumb web 2.0 app isnt the only economy you need to think about.
some of the biggest companies started in the last downturn like netflix, hi5 and skype. deliver value and generate revenue....its not that hard guys
Björn
· 1 year ago
The advertising on your blog is horrible. Flashing sidebars might be acceptable, if unpleasant, but overlay popups are not acceptable.
Mark Evans
· 1 year ago
Robert,
You've turned into the Dr. Doom. Not to suggest you're off the mark in pointing out the new economic landscape but how about using offering some constructive things companies can do to ride out the storm. You've had enough experience and talked to enough people to offer solid perspective on how smart companies operate in tough times.
Mark
Vic Berggren
· 1 year ago
Perhaps the companies you've indirectly referenced that have millions in monthly revenue don't have any bottom line margin to go with it... thus no ability to borrow money any longer?
Is that the situation Robert or are these profitable companies with strong balance sheets?
Robert Scoble
· 1 year ago
Vic: these are profitable companies with strong balance sheets. I'm even hearing IBM is having a tough time getting credit. This is a credit crunch. Do you now get it? Even people and businesses with GREAT credit are having trouble getting credit. That is why this is really troubling to me.
Danut Croitor
· 1 year ago
Hello,
on the long run, small business will win from this because we might get more space to grown on long term;
on short, we need to cutoff maintenance costs if we want to stay alive.
Quoting Robert: "Vic: these are profitable companies with strong balance sheets. I’m even hearing IBM is having a tough time getting credit. This is a credit crunch. Do you now get it? Even people and businesses with GREAT credit are having trouble getting credit. That is why this is really troubling to me."
Robert, you sound like an idiot stating the obvious.
Vic Berggren
· 1 year ago
Robert, IBM is operating with something like 40% GM. I'd have a hard time believing they couldn't securing credit. Has that been published anywhere or just something you've heard?
Justin Siegel
· 1 year ago
Hi Robert,
I'm the co-founder & CEO of mobile social network MocoSpace. Currently, I'm not seeing any signs of a slowdown in our mobile or web ad businesses. I suspect it's coming, if for no other reason than media hype (I wonder how many gas masks were sold after 9/11, CIPRO for anthrax, breathing shields for SARS, etc.). Still, it's clear that deleveraging is taking place on a global scale, as it should, and that there will be a significant slowdown. Right now, I'm responding by trying to hire the best and brightest. Of course, if MocoSpace's business deteriorates, I'll have to do the same thing I've done since founding the business, ie allocate our resources as best I can. Personally, I think the VC community and investors in general should, in this case, follow Hank Paulson's lead and triage their portfolios such that they throw additional resources behind their best companies, so they can all take advantage of this environment to grow their teams and businesses.
While I think it's important for management to always be proactive, I don't think it's smart to overreact until the conditions justify it. Otherwise, one is just feeding a vicious circle. As they say, be greedy when others are fearful!
Justin Siegel MocoSpace
Bob L.
· 1 year ago
Robert,
I don't think that there has ever been a better time for a boot strap startup. These tough times force a real business model that provides a sound plan for revenue and profits while growing. Credit may be an issue for many vendors and merchants, but if you can use the revenue from operations to fund you expansion, you should be in the catbird seat over the next 12-18 months.
There is always an overreaction. There are late comers to every party. Credit markets are tight (understatement), but that will change. If you can put your business on a solid footing with a solid plan, you will essentially be pulling back the slingshot. When things normalize, you should be able to shoot.
Keep up the great work.
Bob L.
Carey
· 1 year ago
I think Bob L makes some great points. One of the major reasons the tech boom failed was because everything was overvalued. Dot com's were flush with cash and spending way too quickly and haphazardly.
Growth based on value and profits. Sounds like lunacy, doesn't it?
All Comments
I'm a huge fan of Open Innovation. I'm wondering if this might actually be a time period where crowdsourcing and innovation platforms could thrive, with the ranks of talented (recently laid off) freelancers swelling, and perhaps eager to pitch ideas and solutions to businesses that still need them. An inexpensive crowdsourcing platform might be just the medicine for some businesses and some freelancers. Thoughts?
Given that I've shifted focus to generating revenue via partners with an eye on being acquired by one of those partners.
Many people will make huge mistakes because of that.
Just watch and learn.
When bubbles pop, it's not a bad thing, it's a good thing, never mind that Silicon Valleyfakespeak, of "consolidation".
Time up pony up, and blame your advertisers.
Times are tough, but I'm really excited to be building a startup during these times. Let's do this!
You raise an excellent question and have blogged about it (http://www.tobeanentrepreneur.com/blog/raising-...) my friends on both sides of the equation say its bad already and going to get tougher.
However, I for one don't think us entrepreneurs should all panic, we should take a long herd look at our market and consider where the best place to "focus" our sales and marleting efforts in order to "sell" our way out of this position if we can...if you are twitter with no revenue streams yet then try and find some pronto or do as you say and find a big corporate partner/M&A or just be prudent and expand your runway to the next round.
I also suggest tuning all messages to customers to "value" and "revenue generation/cost reduction" and get your existing customers to generate more revenues for you too.
Jon Gillespie-Brown, Author, So you want to be an Entrepreneur? : http://www.tobeanentrepreneur.com/
Okay, is it just me, or does anyone else see something wrong with that statement?
if youre losing customers why would somebody fund you. glad to see tech startups realize a blog story about your dumb web 2.0 app isnt the only economy you need to think about.
some of the biggest companies started in the last downturn like netflix, hi5 and skype. deliver value and generate revenue....its not that hard guys
You've turned into the Dr. Doom. Not to suggest you're off the mark in pointing out the new economic landscape but how about using offering some constructive things companies can do to ride out the storm. You've had enough experience and talked to enough people to offer solid perspective on how smart companies operate in tough times.
Mark
Is that the situation Robert or are these profitable companies with strong balance sheets?
on the long run, small business will win from this because we might get more space to grown on long term;
on short, we need to cutoff maintenance costs if we want to stay alive.
Regards,
Danut
www.dcrsolutions.biz
Robert, you sound like an idiot stating the obvious.
I'm the co-founder & CEO of mobile social network MocoSpace. Currently, I'm not seeing any signs of a slowdown in our mobile or web ad businesses. I suspect it's coming, if for no other reason than media hype (I wonder how many gas masks were sold after 9/11, CIPRO for anthrax, breathing shields for SARS, etc.). Still, it's clear that deleveraging is taking place on a global scale, as it should, and that there will be a significant slowdown. Right now, I'm responding by trying to hire the best and brightest. Of course, if MocoSpace's business deteriorates, I'll have to do the same thing I've done since founding the business, ie allocate our resources as best I can. Personally, I think the VC community and investors in general should, in this case, follow Hank Paulson's lead and triage their portfolios such that they throw additional resources behind their best companies, so they can all take advantage of this environment to grow their teams and businesses.
While I think it's important for management to always be proactive, I don't think it's smart to overreact until the conditions justify it. Otherwise, one is just feeding a vicious circle. As they say, be greedy when others are fearful!
Justin Siegel
MocoSpace
I don't think that there has ever been a better time for a boot strap startup. These tough times force a real business model that provides a sound plan for revenue and profits while growing. Credit may be an issue for many vendors and merchants, but if you can use the revenue from operations to fund you expansion, you should be in the catbird seat over the next 12-18 months.
There is always an overreaction. There are late comers to every party. Credit markets are tight (understatement), but that will change. If you can put your business on a solid footing with a solid plan, you will essentially be pulling back the slingshot. When things normalize, you should be able to shoot.
Keep up the great work.
Bob L.
Growth based on value and profits. Sounds like lunacy, doesn't it?
Carey
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