Why it is awesome to start a company when there’s a downturn

Over the last few days a slew of bad news on the economic front (falling currency, stock market tumbles) has had many entrepreneurs and folks in the press ask me if they should put off their entrepreneurial venture to a later year.

My own experience is summed up by an attitude I developed many years ago “Everywhere I go, I always take the weather with me”.

The best entrepreneurs dont care what happens around them. They are acutely aware, keenly observant, but largely undeterred and unconcerned – about the economy, macro conditions and price of fuel.

There are 3 great things about downturn.

1. There are far fewer companies starting, because the fence-sitters develop cold feet. So the “competition” is much less.

2. Since there are far fewer companies starting, the fight for both talent and funding is less so. I hired the best folks in 2001 and again in 2008 (when the sub prime crisis hit).

3. Everyone who is a service provider from lawyers and accountants to landlords and the telecom provider is willing to cut you a good deal.

As Nike says – Just do it.

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8 thoughts on “Why it is awesome to start a company when there’s a downturn”

  1. You forced me to comment on this. 🙂

    Of everything you’ve written so far – which I’ve read and cherished keenly – this is one of your most experienced posts. And I can say for myself – it gives me hope.

    Thank you Mukund sir. Keep em coming !

  2. True that! My favorite lines: “The best entrepreneurs don’t care what happens around them. They are acutely aware, keenly observant, but largely undeterred and unconcerned – about the economy, macro conditions and price of fuel.”

  3. Agree on starting during a downturn. because
    1. Anytime is a good time to start. (I take the weather with me point above)
    2. When the economy turns around & if you have done your job well (of product market fit & product development), then you will have more willing people to buy your product and less competition. Market timing is critical for startups.

  4. This has also something to do with people who understand and are acutely aware about what they want to do in life. Like Walt Disney was thoroughly aware about building a world for children when there was little to support his cause. People who are aware about what they want to do in life almost always exclude things that prevent them from doing so. They don’t care if marijuana is illegal. If smoking a pot sounds crazy. If economics don’t work out. Sometimes they don’t care about profit either. They just know what they want to do in life.

  5. Though, I agree to points mentioned by you, isn’t buyers’ cautiousness an alarming issue. I can have a great team, great product, low costs but what happens when noone is ready to pay for the product.

  6. Thanks a lot for this post Mr.Mukund! I have recently quit my job & am starting up against all the opposition from people around citing various reasons including the gloomy economy! Your article has sort of reiterated my point and has given me more confidence going ahead! Thanks!

  7. I have strongly believed in exactly the same thing. It’s the best “nothing-to-lose” situation that the adult life has to offer. The opportunity costs are low, the employers are all being jerks** as are some of the entrepreneurs too, manpower comes cheap. It’s best to be on this side of the table, the hiring side, jobs are so less, and year on year appraisals see negative growth sometimes. And again, the best time to start up was 4 years ago, failing which the best time is now!

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