Sequoia Capital’s Take on the Economy and Impact for Startups

If you’re not freaking out a bit right now with the current economic crisis then you must have ice in your veins. With the meltdown on Wall Street, a lot of us are thinking about how this is going to affect our own businesses. In the web world, some have felt insulated from the downturn, but warning signs are coming in from VC’s loud and clear.

Our business was affected by the credit crisis starting about a year and a half ago. It has been challenging, but actually has led to a refocusing on low-cost services model through Flatsourcing which I believe is poised to thrive in the current enviroment. We got credit when we didn’t need it, which I’m glad we have now, and we have trimmed our cost structure to weather the storm.

This is what other start-ups clearly need to be doing. Launching a product in this market is going to be tough, if you don’t have cash for a long runway, you better have a revenue model that gets you to cash-flow positive quickly. If you are solely dependent on advertising revenue, buckle up, its going to be a wild ride.

The embedded presentation that TechCrunch posted is what Sequoia Capital made to the CEO’s of its startups is interesting for its clear and (relatively) consise explanation of where we are, and how we got here. It’s one of the most comprehensive analyses of the current crisis that I’ve seen and I recommend you take time to understand it and the impact the current enviroment is going to have on your business.


http://viewer.docstoc.com/
CEO_ALL_HANDS_10–7–08_FINAL — Free Legal Forms