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This happens every couple of years in tech. I've personally witnessed 3 downturns now. One was real and two were arguably the best time to start companies. Raising money might be harder, but generally only for bad companies.

Three? 2001-2002 was basically nuclear winter in my experience. 2008-2009 wasn't actually that bad except outside tech (although, I was in Iraq and Afghanistan during all of it). Before that, you'd have to go to early-1990s, when I was...12, and some HN readers weren't born.

I was thinking of 2001-2002 (genuine downturn) and then separately 2003-7 (great time to invest - e.g when I invested in Skype). Obviously 2008-ish (RIP good times) was the 3rd. Maybe I shouldn't have called them "downturns" but instead "depressed VC periods".

I was working in banking 2007-20010, and wasn't so wired into the startup scene then. What was good for startups and tech during that time? (Disclaimer - expecting a repeat of it in the next few years, want to be prepared).

I would think QE 1 + 2, where the abundant institutional capital eventually flowed to VCs since the private markets in the tech sector was the only thing that was really performing post early 2009.

Why would they be good times to start companies? Less clutter for investors to sort through and more available talent?

Mostly: Less competition for users (e.g. there are 600K iOS apps now - too many), and easier to hire (main alternative right now is to get funding and start a company).

Also, fewer marginal companies over-funded and thus competing with you (maybe by selling at below long term cost).

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