I received a nice email from Brian H. recently with a link to an article in the Coloradoan concerning startups and the recession. The article is generally positive and full of ‘experts’ saying startups can thrive in lean times.
From the piece by Cari Merrill,
“Economic conditions are the important part of entrepreneurial endeavors. As an entrepreneur, you need to be thinking about all sources of capital. I believe human capital is way more important to a startup endeavor than financial capital,” said Paul Hudnut, co-director of CSU’s Global Innovation Center for Energy, Health and Environment and course instructor. Much of the success in a startup company is with people who are motivated to see the project through.
I really agree with the point above. Over the past 3 months I have talked to many people about working on my startup and I find very few with the motivational level necessary –regardless of money/funding etc.
The article talks about Colorado specific trends such as biotech and life sciences funding and this is an important point — what industry you are in and where you are physically located will determine what the recession really means to your startup. My free consumer website business (launching in a month) should not be affected by recession. People are not going to abandon the internet and especially not free sites that provide some value/service.
Moreover, the location issue may determine many things — what kind of talent is around, whether people/companies are moving in or out. In a recession, places rich in human capital may present great opportunities to get cheap talent.