

Five reasons why a recession is a good time to start a company - ilamont
http://www.thestandard.com/news/2008/03/20/five-reasons-why-recession-good-time-start-company

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Flemlord
Was that meant to be funny? All but one of the points essentially say it's
good to start a company in a recession because it's really really hard, and if
you somehow manage to survive, you'll end up tougher, leaner, and meaner.
Here's a tip, guys: start your company at a time and place where there are no
constraints and even the biggest idiot can be successful.

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hernan7
Well, back in the days of the dot-com craze the biggest idiots were indeed
successful. For a while, at least.

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astine
So... starting a company during a recession is a good thing because it will
force you to adopt best practices? What about just adopting best practices
during a boom? Wouldn't that be MORE advantageous?

Seriously, how is adopting an advantageous behavior an advantage if its sole
purpose is to offset a disadvantage? It isn't. If you're not frugal, your not
going to be able to start your company in a boom, much less a recession.

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run4yourlives
It's one thing to focus on best practices, it's another thing to have best
practices forced on you.

~~~
optimal
Practice your best, and you won't be bested by your practices. - The Sphinx

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mkn
I think that some of the better startup ideas would actually do better during
a recession than otherwise. If your product or service reduces a business cost
or opens up an untapped (monetary, social, or other) revenue source, people
and businesses will be more likely to use your product/subscribe to your
service during a time when business is slow. The two things you need as a
startup are attention and early adopters. If business slows, both businesses
and people have more downtime (which is just more attention in the attention
pool that you can vie for) and are more receptive to novel solutions to their
tight budget. (Your startup is novel, right?)

In short, businesses that increase market efficiency in novel ways seem, to
me, more likely to succeed during a recession. This is so obvious that I'm
surprised the article didn't mention it.

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m0nty
None of those are unique to a recession: you should be frugal, you should look
at your ideas again, etc. Top reason to start a company during a recession:
your competitors will go bust.

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spencerfry
I don't think she's saying that all of her 5 points are unique to recessions
per say, but rather she's saying they're more apparent and important during a
recession. While her interesting points to me -- being frugal and taking a
closer look at your idea -- apply to startups during the state of any economy,
they’re further highlighted during a recession. The only real point that
applies to recessions alone is #4, which is quite significant and important to
keep in the back of your mind.

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angstrom
Best reason: Because if you start in a recession, you have better odds of
being acquired with a rediculous valuation during a boom cycle.

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ed
Good things come out of recessions, but a high valuation is rarely one of
them. Anyone want to guess what Flickr's valuation would be today?

[http://siteanalytics.compete.com/bebo.com+flickr.com/?metric...](http://siteanalytics.compete.com/bebo.com+flickr.com/?metric=uv)

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sabat
A lot of startup people aren't interested in valuations -- least of all
valuations made during a recession.

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sabat
To the guy(s) who downvoted me: are you really interested in (IPO) valuation?
Are your sell-off plans so finely detailed that you have to sell during a
recession?

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petercooper
Starting a company in a recession is also a good idea because your industry is
less likely to be filled with professional BSers and "wave riders" and your
natural talents can shine through a lot better with the lack of competition.

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iamdave
Good time to start a company, what about the rest of the economic front? If a
startup is being frugal, does that invariably mean the people who use services
are going to be frugal?

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run4yourlives
Constraints are good. Building a foundation in an environment full of
constraints will make for a stronger foundation.

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mchang16
Thanks for all the comments - I wrote a follow-up to this article and posted
it on my blog. [http://www.16thletter.com/2008/03/21/more-on-starting-a-
comp...](http://www.16thletter.com/2008/03/21/more-on-starting-a-company-in-
an-economic-downturn/)

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edw519
One reason why a recession is a good time to start a company: Because the
well-funded riff-raff drops out sooner.

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andr
This one got a double serving of Kool Aid.

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sabat
A lot of people do start companies during 'downtimes'. Off the top of my head:
sixapart started when both Ben and Mena got laid off. Flickr was pretty much
the same story IIRC.

Also could get one more attention -- maybe -- because the media won't
necessarily expect anyone to be doing anything positive. Recessions are one
big moan, and the 'yipee!' of a startup will stand in stark contrast. IMHG (in
my humble guesstimation).

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hernan7
Wasn't Oracle funded during a recession too?

