With all the talk about the Startup Bubble, one thing that is commonly lost is that we are MEASURING the wrong thing. If we’re talking about the Startup Financing bubble, then by all means, it’s likely to peak, or even pop, and soon, for sure. But today’s startups don’t require the same amount of capital to get going that the 1st DotCom Bubble’s startups did. It’s easy to bootstrap with low cost Cloud Computing, Software frameworks that let developers get apps or sites up & running in 1-3 months, and a new clean startup philosophy to focuses on Customer Development and Iterating (pivots) over large scale tech investment. These days, you never hear the phrase “If you build it they will come”.WallStreet Journal post in 2010 this time last year. Of course it can’t/couldn’t continue. I’ve read at least 10 posts in the last 2 weeks about the investment market peaking for Startups, and at a minimum that the Valuations are beginning to stablize or even decrease.
Now I’m glossing over an important point: which is
Nevertheless, the global economic slowdown, which already has begun according to America’s recession arbiters, will hurt sales at companies both large and small.
There is a lot to be said for this theory, but when you’re labor costs are 1 developer, 1 business development/sales guy, and 1 designer (most of whom are under 25 and don’t have families) then it doesn’t take a large amount of Revenue to keep the growth going strong.
It’s true folks, there is less money being sloshed around today than there was a year ago, and that’s going to have an impact on your next Round. Blogger’s typical end this kind of post with “Better go get that money now!”