Mike Butcher from TechCrunch UK started the second panel as a depressed man. The credit crisis not just affects the world’s economy, but also the mood of one of Europe’s best bloggers. Luckily there were four investors at Plugg to cheer him up a bit.
Paul Fisher from Advent Venture Partners noted that lots of the start-ups have an advertised-based business model. And online advertising is still growing. Moreover, there’s a continued roll-out of broadband, specifically in Eastern Europe. He also said it’s a challenging time for VC’s: “Talent is a lot more expensive now”. So an important issue, according to Fisher, is that start-up expect more than VC’s.
Julie Meyer (Ariadne Capital) sees the crisis as a way to seperate the women from the girls and the men from the boys. The one’s that really want a start-up will pursue. So she sees it as some kind of filer. “It forces entrepreneurs to be a Fiat Punto instead of a Mercedes S class. Discipline is important now”. Reshma Sohoni from SeedCamp agreed with her: “Companies are now more careful with cash burn and costs”.
So in a few years, people will ask successful entrepreneurs: “What’s your secret?!” Those guys will then probably say: “Wel, we started in Q1 of 2008 and learned to start a company in an efficient way.”
The investors convinced Butcher. I even heard him saying a remarkable thing, something you would expect from a optimist instead of a guy who just lost his faith in world economy: “Yes, it’s a fantastic time to build a start-up.”
“Discipline is important now”.
Now????? Maybe that’s why there is a “crisis” out there, specially when the big ones on The Street don’t discipline themselves
Bush is the one who’s had no discipline…
I started my first successful business in the middle of the recession of the early nineties. Actually it was a great time to build and develop. While the rest of my large monster competitors were cutting back on r&d, and investment in general, I was able to launch and compete within a low key environment. As an unfunded independent developer, this is the idea time to start.
The same fertile ground was around before the first dot.com bubble and then again in 2002-3 after the crash.
If we look about now the main players on the dance floor were concieved and built in these post boom times.
This is the time for entrepreneurs, rather than corporations. Companies selling targeted niche products, or services, at competitive prices will do well.
Traditionally, marketing, advertising, and allied trades such as graphic art, photography, copyrighting tend to struggle. This isn’t to say, however, that if you’re in one of these fields you can’t prosper.
Manufacturing is more complex. A downturn in the US might well have implications for China, as well as at home.
BRAY
The Family Business School
The best industry to go for in a crisis is food and other basic necessities, cheap things that people have to buy regardless of their financial situation. The proof is Mcdonalds shares. They seem to be absolutely unaffected, or even helped by the crisis.
Some say that this initially credit crisis turned into a deep and world wide economic crisis will change the very fundamentals of our economies.
Here is an idea to think about. If someone had deposited one dollar into a bank account 2000 years ago for a 2 per cent interest rate only, that deposit would be worth 1,5 raised to the 17th power (an incomprehensibly high amount of money) today. All this means that the idea of interest, the price or cost of money, is in itself nonsensical, but at least unsustainable in the long run. Why do we expect an economy based on an unsustainable principle to function???
The very best explanation of the crisis I have seen is this one: http://whyhypeblog.blogspot.com/2009/02/crisis-of-credit-visualized.html