Startups: Financial Markets Impact?(darrenherman.com)

http://www.darrenherman.com/2007/08/17/the-financial-market-a-noobs-take/

1 comments

If 2000 is any indication, all the funded startups with high overhead will go out of business, all the bootstrapped startups with 2 guys in a garage will tighten their belts, and we'll end up with a lot of startups changing their business model.

Some of the most successful startups of the first 5 years of the decade were born during the tail end of the dot-com boom and survived the recession. HotOrNot launched like a month before the NASDAQ peaked, had to go subscription, and then started earning millions a year. Blogger was started in 1999, laid off everyone in the bust, and then reemerged as the market started warming up. Flickr did most of their innovation and programming during the bust. Del.icio.us was the last of a string of side projects done while Joshua Schacter kept his day job.

I just read Phillip Kaplan's Fucked Companies, and the one thing that all the dot-com flameouts had was that they took millions in funding and hired hundreds of people. The one thing that all the survivors had was that they hired no more than a dozen people and had or found a business model that actually brought in cash. Make more money than you spend.