In particular how do a recession, rising oil prices, weak dollar, credit crunch affect the probability of startup success. Is this a good time to quit your "safe" day job and dive in head on into a full time startup attempt.
Ask YC: How will the US economy affect the probability of startup success
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Re: Ask YC: How will the US economy affect the probability of startup success
#2In the early 2000, we had Asian financial crisis, Y2K, dotcom bomb, telecom burst, stock market crash, 9/11 attack, war in Afghanistan, SARS, launch of the Iraq invasion, outbreak of avian flu, but yet in retrospect, it was the best time to do a startup. So you can't really differentiate with good timing. But you can differentiate from bad timing. When it is difficult for you, it is also difficult for everyone else. But they don't have the same strong will to succeed as you do. By the way, if you have the luxury of pondering where or not this is the right time to leave your day job, my advise is to stay where you are and just wonder out loud what could have been and should have been. It really takes a lot to succeed in a startup. Having any backup plan is the wrong place to start. Good luck.
Re: Ask YC: How will the US economy affect the probability of startup success
#3The more people go on and on about how bad the economy is, the more they are self-selecting out of doing a startup. That's good for me.
Startups work or don't work based on how they relate to users. The "economy" is a huge average of all kinds of things. If you're making users happy, just keep your eye on the ball. All things being equal, I would rather run a startup in a hot market where all the other competitors were depressed than the same market swimming in investment cash.
Of course, there are lots of exceptions. This answer was just a generalization. YMMV. I'm sure somebody will reply with something pithy like "but if the town is on fire, should you really be trying to sell charcoal?" to which I reply, "if you have a product people want, it doesn't matter what the heck the rest of the town is doing"
Re: Ask YC: How will the US economy affect the probability of startup success
#4In the early 2000, we had Asian financial crisis, Y2K, dotcom bomb, telecom burst, stock market crash, 9/11 attack, war in Afghanistan, SARS, launch of the Iraq invasion, outbreak of avian flu, but yet in retrospect, it was the best time to do a startup. So you can't really differentiate with good timing. But you can differentiate from bad timing. When it is difficult for you, it is also difficult for everyone else.…
By the way, if you are interested in learning more about the trials and tribulations of a startup, please take a look of my online book, http://www.StartupForLess.com.
--Denny--
Re: Ask YC: How will the US economy affect the probability of startup success
#5Weak dollar is a good thing if you're in the US and making a product or service that people abroad would buy. It's cheaper for them, hence they'll be more likely to buy and will buy more of it. On the other hand if you're in Europe, Australia, or even Canada and you plan to rely a lot on US sales then you may want to pick something different. Other than that I don't see anything significant to worry about.
Re: Ask YC: How will the US economy affect the probability of startup success
#6The US economy shouldn't effect you if you have something to sell to international consumers. Focus on internationalization and a weak US dollar can be good for your business.
Re: Ask YC: How will the US economy affect the probability of startup success
#7heh. I think you're asking the wrong people man. We're a pretty optimistic bunch!
Re: Ask YC: How will the US economy affect the probability of startup success
#8It might give some investors cold feet. But I don't think startup founders should let the state of the economy be a deciding factor in what they do. It has much less effect on the outcome than how hard you work, or how carefully you hire, or how much attention you pay to the design of your site.
Re: Ask YC: How will the US economy affect the probability of startup success
#9In the early 2000, we had Asian financial crisis, Y2K, dotcom bomb, telecom burst, stock market crash, 9/11 attack, war in Afghanistan, SARS, launch of the Iraq invasion, outbreak of avian flu, but yet in retrospect, it was the best time to do a startup. So you can't really differentiate with good timing. But you can differentiate from bad timing. When it is difficult for you, it is also difficult for everyone else.…
By the way, if you are interested in learning more about the trials and tribulations of a startup, please take a look of my online book, http://www.StartupForLess.com . --Denny--
Ok, we get the message: http://news.ycombinator.com/threads?id=gigamon
Re: Ask YC: How will the US economy affect the probability of startup success
#10Depends how much cash you have. The defining feature of recessions tends to be that cash is harder to come by - it's harder to find investors, and it's harder to get people to spend money.
The flip side is that anything that cuts cost and saves people money in a recession does well. Also, if unemployment goes up, people tend to have more time on their hands, which benefits attention-based businesses. It's just that converting that to cash becomes more difficult. Advertising spending tends to drop like a rock in recessions.
If you're likely to run out of cash during the recession, don't quit, because it'll be very difficult to find more. If you have enough to make it through to the other end, you can do very well. Business activity doesn't stop in recessions, it just slows down, and you can do all the strategic aspects (building a product, getting market share, building brand recognition) just as well as in boom times. Better, really, since recessions tend to flush out competitors.