There’s never a good time to start a business — so there’s never a bad time. Even today, when banks are more risk-averse than ever, is as good a time as any, believes venture capitalist Saul Klein. That goes for launching new products, too. Google and Skype are just a couple of success stories that began in a downturn.
There may even be benefits to launching a new venture or investing in new products during a recession. Meldrum Duncan, co-founder of innovation specialists ?What If!, says recession can be a great time to steal a march on a larger competitor, innovating “while the giant sleeps”.
There’s nothing more focusing limited cash resources to help spur innovation — and the fact that there is “no more bloat” is a good thing, according to Siebel co-founder Pat House.
So what would venture capitalists advise when it comes to starting a business – or developing a new product in-house? . Here are some tips from Index’s Klein and fellow investor Chris Sacca – directed at fledgling entrepreneurs, there are some that apply equally to enterprising individuals in bigger businesses.
- The capital’s there, it’s just harder to access. So bootstrap like crazy and be hard kill.
- Use the free resources that are available via the Net.
- Get out there and pitch: Let your product speak for itself — build a prototype if it’s affordable, and send out a URL to potential investors and buyers.
- Select good people to work with — at board level, seek out non-executives who both challenge you and support you.
- Learn from the developing world. Look at companies like the online tutoring service Tutor Vista in India. How are companies in emerging markets developing lower cost products and services?
- Get feedback if your idea’s been rejected — whether it’s by a manager, a potential customer or an investor. Why no? What could you do to turn that no into a yes?
