Startup in bad economy

What happens to the startup sector when economy goes south? Let us discuss top 3 drivers one by one:
1. Funding: Dries up. Very hard to get money for new ventures. (Negative)
2. Resources: Good opportunity. A lot of high talented people in tech, marketing, operations etc are looking for jobs. Simple rule of demand-supply and you can see the picture. (Positive)
3. Creativity: Necessity is the mother of invention. With that phrase, I would call it positive.

In MBA terms, I would put them as : Finance, Operations, and Innovation. All 3 of them are required to launch a succesful comnpany. With 2 positives and 1 negative (finance), it does not bode well. But..hold on a sec…do we really need a lot of capital to start a new Internet company? Also, bad economy means that operations will become a bit inexpensive as well. So, its not a dire situation.

Overall, it boils down to individuals. Succesful entrepreneurs and VCs would tell you that its the team that matters (not the idea). And in a downward economy, it might matter a bit more. But at the end of the depends on you. If you have that “instinct”..then you will survive. If not, then join the ever increasing club 🙂


About Sandeep Chauhan
Strategy/Marketing professional with interest in analyzing growth opportunities and trends.

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