Starting a company during a down economy

Not sure whether this is lucky or unlucky, I am probably wedded to the pattern of “starting a company during a down economy”. For comrades who are starting a company during the current couple of years, you are probably wedded to the same pattern too.

To me, the root trigger of “falling” into this pattern is that I started Nexaweb right after the dot com burst and raised Series A in 2003, the year of the lowest venture capital investment over the last 15 years. After a few more years of growing Nexaweb and finally getting ready to start something new, the economy also went through its own cycle. So here I am, trying to start a company during a down economy again. What’s next? It is highly likely that the time when I start yet another company in the future will coincide with a similar moment in yet another economic cycle and so on.

Gee. I should have read this blog piece when I was young, and launched Nexaweb either a few years earlier or a few years later.

The reality is that entrepreneurs don’t have too much control on such things. Entrepreneurship is about seeing an opportunity, believing in the opportunity and taking actions on the opportunity. Opportunities come and go independent of the economy or anything else. If you see it and believe it, the entrepreneurial spirit inside doesn’t give one too much choice but to do something about it. In some sense, starting a company is like having a baby: you can rationalize, plan and time it all you want beforehand. However, once the triggered is pulled, the baby comes at the time designated by the almighty regardless of the state of the economy, one’s wishes/desires or anything else.

The other side of the reality is that it is not that bad to start a company in a bad economy. Some say it is tough to start something new when everyone else is hiding under their desks. Certainly true. Some other people would say it is actually good to start something now given the abundance of talents and etc. I can argue either way. Frankly, I don’t think it matters that much either way. Regardless of the timings, it is about being “relentless resourceful” (citing Paul Graham) in a way that is fairly similar to long distance running to me.

For comrades who are in the middle of starting up something now, here is a good diagram to look at (citing from Brad Feld). It shows some empirical data between the timing of economic cycles and good companies founded: