Startup general interest

Guy Kawasaki on why now is a good time to be an entrepreneur

By June 12, 2009 4 Comments


Most of this has been said before, but Guy sums it up nicely (from Scoble’s new site Building43):

this pesky recession we’re in. It’s the worst time ever to start a company, right? Only if you’re not an entrepreneur.

If you are an entrepreneur, the economics have never been better:

  • Talent is free or cheap. Sorry, I’m not a warm and fuzzy guy, but the truth is that there are lots of talented people who are unemployed or under-employed right now. If there was ever a time to get great people for free or cheap, this is it.
  • Tools are free or cheap. With open source stuff like MySQL, Drupal, PHP, Rails, and WordPress, can tools get any cheaper? You’d really have to work at it to spend a lot of money for the tools to build something these days.
  • Storage, bandwidth and servers are free or cheap. I’m old enough to remember when you had to buy servers from Network Appliance to host your web site. Now with the cloud services that companies such as Rackspace provide, you can get more storage, bandwidth, and servers for $1,000 a month than you’ll be able to use.
  • Marketing is free or cheap. The single best way to market your product or service is Twitter, and that happens to be free. Facebook is a close second, and it’s free too. Sucking up to bloggers takes effort and swallowing your pride, but it’s not expensive.

The only thing that’s wrong right now is that very few people and organizations are spending money. Thus, while the cost side is under control, the sales side isn’t. You could adopt the logic that you’ll start innovating and entrepreneuring when the recession ends, but that is plain stupid. You want products and services that are ready to roll when the recession ends—not a year later.

This is doubly true as even in the good times most startups don’t generate much revenue in year one – and if you start now there is a good chance the recession will be over by the time you reach year two.