9 ms·

Winter is coming

295 points by jamesjyu 15y ago

DanielRibeiro 15y ago
...the truly great entrepreneurs didn't get in this to make money, but to change the world Great food for thought.
- nhangen 15y ago
  I hate that mantra. Personally, I got into this because it's the only way I know how to live. I'm not happy unless I'm building, it just so happens that makes me an entrepreneur.
- bluekeybox 15y ago
  Beware of schemes that claim that your participation in them will help change the world but which come with no money attached. One is only capable of doing great good if one is also capable of doing great evil. More simply: to do a lot of good (not just a teeny tiny bit), one has to be capable of something that affects real world, ergo one has to be powerful. Capability is closely linked with power (and, in a Western society, the closest measure of power is money). If one cannot easily turn his or her work into money, one should question how much capability for real change one has.
  - DanielRibeiro 15y ago
    I agree. That's the problem with quotes and mantras: they are a oversimplification of a much more complicated reality. But I find that as long as you don't forget the forest, having some highlighted trees does help you find your way.
  - geboyr 15y ago
    But it's not impossible to be powerful without turning your immediate work into money. You might be able to help others make/turn their work into money, which makes me go off on a tangent in my head about an algorithm that could calculate how much power one truly had based on n degrees of separation out from their work.
    - bluekeybox 15y ago
      > You might be able to help others make/turn their work into money Of course it's possible but it introduces a level of indirectness. Once you have indirectness, it becomes harder to measure your impact. Fields where one's impact is hard to measure tend to attract BS artists who use the ambiguity to their advantage, to claim that they are worth more than they really are. The algorithm you are thinking of will fail unless it has some way to empirically measure impact, in which case the algorithm would be trivial.
chailatte 15y ago
Winter is already here. - Stock Market Drops. VCs Hold Partner Meetings. What Happens Next? "I (Mark Suster) told him (entrepreneur), 'close your round by August 2nd. After that, all bets are off.'" - http://news.ycombinator.com/item?id=2864031 http://news.ycombinator.com/item?id=2864031 - For Some, Rude End to IPO Dreams "The sound you just heard was the IPO window slamming shut," wrote Geoff Yang, a partner at venture capital firm Redpoint Ventures in Menlo Park, Calif" - http://news.ycombinator.com/item?id=2866438 http://news.ycombinator.com/item?id=2866438 - We're in the second dip of the global economic depression http://news.ycombinator.com/item?id=2860910 http://news.ycombinator.com/item?id=2860910
- jeffreymcmanus 15y ago
  It doesn't follow that just because the stock market dips that funding for startups will suddenly evaporate. Most venture funds are investing money that was raised from limited partners years ago. And at any rate, most VCs go on vacation during August, so if you don't close your round by August 2, all bets are off...until September 1. This happens every year. A good counterpoint to this sky-is-falling is Dave McClure's quote in the Wall Street Journal, in which he says that the market dip will change his investment velocity not a whit. http://blogs.wsj.com/venturecapital/2011/08/08/early-stage-investors-unruffled-by-stock-markets-bad-day/ http://blogs.wsj.com/venturecapital/2011/08/08/early-stage-i...
  - wunderfool 15y ago
    dave mcclure says no recession?!?!? well, that settles it
  - chailatte 15y ago
    "And at any rate, most VCs go on vacation during August, so if you don't close your round by August 2, all bets are off...until September 1. This happens every year." I am not sure why you feel there's a need to make an unrelated assumption when, if you actually read the well-written techcrunch article, there's a reason why Mark said that - it's related to funding certainty and economics.
edw519 15y ago
From "The Godfather", about the cycles in their "industry": MICHAEL How bad do you think it's gonna be? CLEMENZA Pretty goddamn bad. Probably all the other Families will line up against us. That's alright -- this thing's gotta happen every five years or so -- ten years -- helps to get rid of the bad blood. Been ten years since the last one.
- bilalhusain 15y ago
  that's a well fitting comment for the startup ecosystem, 256 contender?
- nashequilibrium 15y ago
  When has entrepreneurship ever been easy? sighhh!!
- analyst74 15y ago
  Winter just makes the surviving ones more profitable, mafias or entrepreneurs!
wccrawford 15y ago
I think if people were more cautious, like this guy, the summers wouldn't be quite so crazy, and the winters wouldn't be quite so bad.
- deleted 15y ago
  [deleted]
ryanisinallofus 15y ago
Stocks are pointless, 401ks are dropping, inflation is high... Sounds like a good time to spend your money on a new company with actual profit potential.
sp4rki 15y ago
I see what you did there. I totally agree with this sentiment, and totally think that it's only a matter of time until we need to start dealing with the consequences of not being prepared for the "Winter". I'm also interested in seeing which players end up being "part of the NightWatch" and keep going because it's what they love and pledged their dedication to, and which players are only in it to play the "Game" and see whom can get the most money, popularity, recognition, etc. Also, as a fan of the books I loved the analogy between the Ice and Fire saga and entrepreneurship this days.
TomOfTTB 15y ago
I don't agree with much of this for two reasons... 1. The bubble for already funded companies burst in the 90s but that didn't dry up funding. The truth is a wealthy person's best bet in a down economy is a small startup. Because the potential upside is so much better than any other investment. A company like Y Combinator can literally fund hundreds of startups and as long as at least one has a significant payday at the end Y Combinator still comes out on top. 2. The problem with borrowing money now, as an American, is the dollar is falling and most people expect another round of Quantitative Easing which will almost certainly exacerbate that. It usually doesn't make sense for a startup to borrow a significant amount of money in a currency whose value is dropping. Because you only get so many funding rounds and you don't want to waste them by not getting enough money to buy what you need. Which is what happens when a currency's value drops after you get the funding.
- Symmetry 15y ago
  No idea why people downvoted you... It usually doesn't make sense for a startup to borrow a significant amount of money in a currency whose value is dropping. I disagree with this though. Depreciating currency is awesome if you've got debt financing, because all of the value of your debt drops, but you only lose the value of the money you haven't spent yet. OTOH, it might be bad because uncertainty about depreciation will cause financiers to be reluctant to give you good terms. Now, it certainly is a bad thing when you're getting equity financing, but that really isn't "borrowing".
  - TomOfTTB 15y ago
    I agree in the sense of having an asset and paying it back but I was thinking of it in terms of budgeting and getting through the year (or however long) For example, say you budget for a year of operation and assume you need $1.5 million and get funded at that. Then the value of the currency falls. This means your revenue falls and the value of your cash on hand falls. Suddenly you're out of money and its hard to go back for another round so soon after the first. That's where I see the problem. If you can survive long enough to pay the debt back in full a down currency works for you but it could be the death of you.
ratsbane 15y ago
There are opportunities even when the tide goes out, even the chance to find things on the beach which the sea has left behind.
JDulin 15y ago
The entreprenuers who are determined and flexible enough to keep going through the crucible of winter may have an even better opportunity to succeed than they did in summer. http://paulgraham.com/badeconomy.html http://paulgraham.com/badeconomy.html
Symmetry 15y ago
Wait, didn't winter start in '08? I could have sworn Ice Giants came from the north and dragged down the towers of the Lehman Brothers.
timmyd 15y ago
Its funny that in 2008 - we see posts like "RIP Good Times" - http://techcrunch.com/2009/10/06/r-i-p-good-times-one-year-later/ http://techcrunch.com/2009/10/06/r-i-p-good-times-one-year-l... - and yet nothing - fundamentally - came of it. I'm sure Sequoia's companies left that meeting - scared, sacked a bunch of employee's, cleaned out the closest - and the VC's were happy because the capital lasted longer ensuring no more dilutions for themselves and a "trimmer" business even if it was not required. VC's love to blow hot air because it's self-serving. "OMG da world is ending - raise cash now". Of course, many go out and do this [for whatever reason] and get hit by lower valuations [VC's +1 up]. VC's have already raised their HUGE current funds - most in the vicinity of 500m+. So how does any of this affect VC's ? They want more "bang-for-their-buck" and by getting lower valuations, they get higher returns and larger management cuts on exits. I'm not suggesting this is a flaw - it's capitalism and the opposite side of what a start is doing in trying to get larger valuations. Seemingly, the fundamental problem that exists in the United States is that the debt level has been never ending. The spending mentality of the U.S. government since Regean, Bush, Clinton [not so much], Bush and now even Obama [in my view - cleaning up the mess] was never one of fiscal or monetary conservatism. I'm an Aussie - our country doesn't have hardly any debt [queue smart-ass arrogance smirk]. Good fiscal and monetary policy ? Not really - as much as our politicians love to think so - it's just not over promising and over spending for political gains. "I'll give you tax-cuts of 5%" - "I'll do 10%" - "I've just discovered I can do 15%!" and so on it seems in the US - then the whole country argues about whether tax-cuts are better or worse or giving the wealthier socioeconomic bracket more money is better or worse. I don't premise to understand the entire US Financial or Political system - I'm merely an international observer. What you can observe - large socioeconomic cuts to fundamental social welfare results in those scenes unfortunately unfolding in London. You rip apart societies most vulnerable social fabric and it's not going to respond happily. To suggest we are heading for another "dot-com" boom - at least in my opinion - is totally unfounded. The internet is in another era juxtaposed against the 2000's with widebroadband adoption and reliance. IPO's are not finished when they are based on real fundamental revenues and profits underlined with good talent. Any rational investment is unpinned by this - Facebook would still raise a huge IPO - because large financial institutions still have huge funds available to them and see the rationality of the investment. Similar to other business' that have real revenue and real values. Solid business basics win as per Warren Buffet "Be fearful when others are greedy, and greedy when others are fearful". Convince investors to be greedy in the current climate and nothing matters. You'll win.
6ren 15y ago
Note: pizzas boom in recessions, substituting for expensive dining.
- fosk 15y ago
  This is true, it's not recession for everyone and there are great opportunities in winter as well. If you make a compelling product that gets traction, there's no reason to not get some money. It's more challenging, but I mean it's ok, it's part of the game.
trevelyan 15y ago
Winter is icummen in, Lhude sing Goddamm. VCs stop and angels drop, Like aggregate demand.... Sing: Goddamm. Downcast brow and skittish DOW Show profit on the lam Suster shivers, Techcrunch quivers Damn you, sing: Goddamm. Goddamm, Goddamm, (and Groupon's canned), Goddamm, Watch Pincus do facepalm. Sing goddamm, damm, sing Goddamm. Sing goddamm, sing goddamm, DAMM.
- vynch 15y ago
  lol downvoting this must feel really good!
  - trevelyan 15y ago
    I was pretty pleased about working "the winter's balm" line into that bit about Zygna. And there were a couple of upvotes early on, but I guess meta jokes about English literature don't fly on a hacker audience.
    - vynch 15y ago
      on a serious note...i dont really think this particulat post is that bad...but encouraging such posts can turn our beloved community into reddit!
porterhaney 15y ago
You can't go skiing in the summer. It's easy to be all roses in the summer time, but only the tough get to make it through winter. Should be fun!
deleted 15y ago
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gordonbowman 15y ago
+1 just for the title
grandalf 15y ago
Check out my counter-argument: Why are startups hot now? Not because the economy is good or because the startup ideas people are having are particularly good, but because risk seeking investors are trying to shove capital anywhere they can. After the crash of 2008 lots of avenues (created by Wall Street post Financial Modernization Act) to invest this capital were closed, and the growth of the startup scene, particularly the NY startup scene, is a direct result of this. Couple this with a real negative interest rates and you have a nice long boom period where startups are the best thing going for investors who are getting free money (via negative interest rates) to gamble with. Why will this continue? Exactly the same reason why Yahoo is still in business and why Microsoft is still profitable. There is tremendous room for innovation, growth, and all the improvements associated with those things. Soon joe.sixpack@yahoo.com will wake up and start demanding more and more web innovation, and the void will be filled by startups doing clever, lucrative, disruptive things. I personally can't believe that anyone can tolerate using Yahoo for anything... and I'm stunned that people tolerate 2 hour battery life Android phones, Windows Vista, etc. The problems (areas for improvement) are far deeper than most tech-savvy people (such as on HN) can imagine, and the population (thanks mostly to Facebook) is slowly waking up to what it actually wants to do online. To borrow the OP's metaphor, we're in the very early dawn of a beautiful, early spring day, etc. This will occur at least until the cost of borrowing increases substantially. Also, anyone who thinks we have an information economy in 2011 will look back in a few decades and laugh.
- ChuckMcM 15y ago
  This is a good point, the meta comment is that post 2008 a lot of changes were put into place snd so this 'crash' has different things going on than the last 'crash'. Its this action, where the system responds to booms and busts which makes predicting the future from past events difficult at best, and completely non-useful typically. I have talked with folks who have investment capital that is 'stuck' which is to say they have money they have allocated to the 'high risk' portion of their portfolio and yet fewer options for investing it. And while YC is a startup incubator, I also see it as a VC incubator. I would expect some of the folks who are successfully investing small amounts into a bunch of companies will begin to want to make slightly bigger bets and that will push them out of YC into a more VC like situation. The original article's message that things go in cycles, and you need to be able to deal with that, is spot on. And in times of high volatility only the folks who have that sort of risk/reward profile that startups offer want to play (the more conservative investors are worried that their 'moderate' risk capital is at risk and so they double down on those bets taking all their high risk capital off the table). More startups chasing fewer dollars, means a more competitive environment. But that being said, startups take time to get from concept to launch, cycles take time to go from down to up. The absolute best time to start a company is just before the end of the winter.
hnsmurf 15y ago
I'm not so sure. I think the broader economic forces may help tech companies rather than hurt. No matter what happens, America (and the world) will still have a lot of very wealthy people and institutions. Those people need to put their money somewhere. The stock market is scary, bonds and banks don't pay anything. If you had $100 million tomorrow to invest what would you do with it? I'd start looking for startups. 10% unemployment seems bad to us, relative to our more historical 5%, but Europe has dealt with that for decades. People still buy iPhones and sign up for Netflix. Even if the market for new services is reduced by a few %, the quality of new services will more than make up for it. Rich people will still want to make money and startups will still be an appealing way to do it.
- chailatte 15y ago
  I would invest in gold. No hassle. No risk since every country is printing money and putting savers at risk. Doubled in price in dollar in two years thus far.
  - checker 15y ago
    Gold is the safe bet, but some people like to diversify with some riskier investments.
    - kragen 15y ago
      That's a peculiar sense of "safe". The value of gold fluctuates substantially over time, even over fairly short periods of time. Sometimes (like the last decade) it goes up; other times (like most of the 1980s and some of the 1990s) it goes down. It's easy to lose half of what you invested; if you time it right, you can lose seven-eighths. The peculiar sense in which gold is "safe" is that it tends to go down just as much as it goes up; that is, it isn't subject to secular inflation or deflation.
      - checker 15y ago
        Thanks for the explanation. I guess I was repeating what I've heard from the talking heads on TV that really provide popcorn financial advice.
encoderer 15y ago
I can't say I agree with this one bit. One bubble/bust cycle does not a trend make.
- Vivtek 15y ago
  It's good general advice, though - you have to give it that.
sabat 15y ago
The more people say this, the more true it becomes.
wunderfool 15y ago
you should all be ashamed of the groan-inducing apologetica in these comments. in particular: timmyd is an idiot
smountcastle 15y ago
I enjoy reading Eric Ries' posts but I cannot help but be cynical about this, "Remember: in the long run, the surest way to be successful is to create more value than you capture. Remember: the truly great entrepreneurs didn't get in this to make money, but to change the world." I guess his company IMVU created value (in terms of money) but I don't see how an online social entertainment destination where members use 3D avatars to meet new people, chat, create and play games with their friends creates social value or changes the world.
michaelochurch 15y ago
It was March, then I took a nap, and now it's November. This is what you get when Republicans are in charge (and they still are; look at Congress): short, puny expansions and punishing, horrible recessions.
deleted 15y ago
[deleted]
chanux 15y ago
Yeah! There's some truth to the idea of winter. But for the people who are doing it just for the sake of doing it, winter doesn't matter. Make good things. Money will follow no matter what the season is.
mise 15y ago
May I suggest a soundtrack for this article? The Doors - Summer's Almost Gone "Summer's almost gone. Where will we be, when the summer's gone?" The Doors - Wintertime Love "Wintertime winds blow cold this season. Fallen in love, I'm hoping to be."

Winter is coming

295 points by jamesjyu 15y ago

DanielRibeiro 15y ago

...the truly great entrepreneurs didn't get in this to make money, but to change the world Great food for thought.

nhangen 15y ago
I hate that mantra. Personally, I got into this because it's the only way I know how to live. I'm not happy unless I'm building, it just so happens that makes me an entrepreneur.
bluekeybox 15y ago
Beware of schemes that claim that your participation in them will help change the world but which come with no money attached. One is only capable of doing great good if one is also capable of doing great evil. More simply: to do a lot of good (not just a teeny tiny bit), one has to be capable of something that affects real world, ergo one has to be powerful. Capability is closely linked with power (and, in a Western society, the closest measure of power is money). If one cannot easily turn his or her work into money, one should question how much capability for real change one has.
- DanielRibeiro 15y ago
  I agree. That's the problem with quotes and mantras: they are a oversimplification of a much more complicated reality. But I find that as long as you don't forget the forest, having some highlighted trees does help you find your way.
- geboyr 15y ago
  But it's not impossible to be powerful without turning your immediate work into money. You might be able to help others make/turn their work into money, which makes me go off on a tangent in my head about an algorithm that could calculate how much power one truly had based on n degrees of separation out from their work.
  - bluekeybox 15y ago
    > You might be able to help others make/turn their work into money Of course it's possible but it introduces a level of indirectness. Once you have indirectness, it becomes harder to measure your impact. Fields where one's impact is hard to measure tend to attract BS artists who use the ambiguity to their advantage, to claim that they are worth more than they really are. The algorithm you are thinking of will fail unless it has some way to empirically measure impact, in which case the algorithm would be trivial.

chailatte 15y ago

Winter is already here. - Stock Market Drops. VCs Hold Partner Meetings. What Happens Next? "I (Mark Suster) told him (entrepreneur), 'close your round by August 2nd. After that, all bets are off.'" - http://news.ycombinator.com/item?id=2864031 http://news.ycombinator.com/item?id=2864031 - For Some, Rude End to IPO Dreams "The sound you just heard was the IPO window slamming shut," wrote Geoff Yang, a partner at venture capital firm Redpoint Ventures in Menlo Park, Calif" - http://news.ycombinator.com/item?id=2866438 http://news.ycombinator.com/item?id=2866438 - We're in the second dip of the global economic depression http://news.ycombinator.com/item?id=2860910 http://news.ycombinator.com/item?id=2860910

jeffreymcmanus 15y ago
It doesn't follow that just because the stock market dips that funding for startups will suddenly evaporate. Most venture funds are investing money that was raised from limited partners years ago. And at any rate, most VCs go on vacation during August, so if you don't close your round by August 2, all bets are off...until September 1. This happens every year. A good counterpoint to this sky-is-falling is Dave McClure's quote in the Wall Street Journal, in which he says that the market dip will change his investment velocity not a whit. http://blogs.wsj.com/venturecapital/2011/08/08/early-stage-investors-unruffled-by-stock-markets-bad-day/ http://blogs.wsj.com/venturecapital/2011/08/08/early-stage-i...
- wunderfool 15y ago
  dave mcclure says no recession?!?!? well, that settles it
- chailatte 15y ago
  "And at any rate, most VCs go on vacation during August, so if you don't close your round by August 2, all bets are off...until September 1. This happens every year." I am not sure why you feel there's a need to make an unrelated assumption when, if you actually read the well-written techcrunch article, there's a reason why Mark said that - it's related to funding certainty and economics.

edw519 15y ago

From "The Godfather", about the cycles in their "industry": MICHAEL How bad do you think it's gonna be? CLEMENZA Pretty goddamn bad. Probably all the other Families will line up against us. That's alright -- this thing's gotta happen every five years or so -- ten years -- helps to get rid of the bad blood. Been ten years since the last one.

bilalhusain 15y ago
that's a well fitting comment for the startup ecosystem, 256 contender?
nashequilibrium 15y ago
When has entrepreneurship ever been easy? sighhh!!
analyst74 15y ago
Winter just makes the surviving ones more profitable, mafias or entrepreneurs!

wccrawford 15y ago

I think if people were more cautious, like this guy, the summers wouldn't be quite so crazy, and the winters wouldn't be quite so bad.

deleted 15y ago
[deleted]

ryanisinallofus 15y ago

Stocks are pointless, 401ks are dropping, inflation is high... Sounds like a good time to spend your money on a new company with actual profit potential.

sp4rki 15y ago

I see what you did there. I totally agree with this sentiment, and totally think that it's only a matter of time until we need to start dealing with the consequences of not being prepared for the "Winter". I'm also interested in seeing which players end up being "part of the NightWatch" and keep going because it's what they love and pledged their dedication to, and which players are only in it to play the "Game" and see whom can get the most money, popularity, recognition, etc. Also, as a fan of the books I loved the analogy between the Ice and Fire saga and entrepreneurship this days.

TomOfTTB 15y ago

I don't agree with much of this for two reasons... 1. The bubble for already funded companies burst in the 90s but that didn't dry up funding. The truth is a wealthy person's best bet in a down economy is a small startup. Because the potential upside is so much better than any other investment. A company like Y Combinator can literally fund hundreds of startups and as long as at least one has a significant payday at the end Y Combinator still comes out on top. 2. The problem with borrowing money now, as an American, is the dollar is falling and most people expect another round of Quantitative Easing which will almost certainly exacerbate that. It usually doesn't make sense for a startup to borrow a significant amount of money in a currency whose value is dropping. Because you only get so many funding rounds and you don't want to waste them by not getting enough money to buy what you need. Which is what happens when a currency's value drops after you get the funding.

Symmetry 15y ago
No idea why people downvoted you... It usually doesn't make sense for a startup to borrow a significant amount of money in a currency whose value is dropping. I disagree with this though. Depreciating currency is awesome if you've got debt financing, because all of the value of your debt drops, but you only lose the value of the money you haven't spent yet. OTOH, it might be bad because uncertainty about depreciation will cause financiers to be reluctant to give you good terms. Now, it certainly is a bad thing when you're getting equity financing, but that really isn't "borrowing".
- TomOfTTB 15y ago
  I agree in the sense of having an asset and paying it back but I was thinking of it in terms of budgeting and getting through the year (or however long) For example, say you budget for a year of operation and assume you need $1.5 million and get funded at that. Then the value of the currency falls. This means your revenue falls and the value of your cash on hand falls. Suddenly you're out of money and its hard to go back for another round so soon after the first. That's where I see the problem. If you can survive long enough to pay the debt back in full a down currency works for you but it could be the death of you.

ratsbane 15y ago

There are opportunities even when the tide goes out, even the chance to find things on the beach which the sea has left behind.

JDulin 15y ago

The entreprenuers who are determined and flexible enough to keep going through the crucible of winter may have an even better opportunity to succeed than they did in summer. http://paulgraham.com/badeconomy.html http://paulgraham.com/badeconomy.html

Symmetry 15y ago

Wait, didn't winter start in '08? I could have sworn Ice Giants came from the north and dragged down the towers of the Lehman Brothers.

timmyd 15y ago

Its funny that in 2008 - we see posts like "RIP Good Times" - http://techcrunch.com/2009/10/06/r-i-p-good-times-one-year-later/ http://techcrunch.com/2009/10/06/r-i-p-good-times-one-year-l... - and yet nothing - fundamentally - came of it. I'm sure Sequoia's companies left that meeting - scared, sacked a bunch of employee's, cleaned out the closest - and the VC's were happy because the capital lasted longer ensuring no more dilutions for themselves and a "trimmer" business even if it was not required. VC's love to blow hot air because it's self-serving. "OMG da world is ending - raise cash now". Of course, many go out and do this [for whatever reason] and get hit by lower valuations [VC's +1 up]. VC's have already raised their HUGE current funds - most in the vicinity of 500m+. So how does any of this affect VC's ? They want more "bang-for-their-buck" and by getting lower valuations, they get higher returns and larger management cuts on exits. I'm not suggesting this is a flaw - it's capitalism and the opposite side of what a start is doing in trying to get larger valuations. Seemingly, the fundamental problem that exists in the United States is that the debt level has been never ending. The spending mentality of the U.S. government since Regean, Bush, Clinton [not so much], Bush and now even Obama [in my view - cleaning up the mess] was never one of fiscal or monetary conservatism. I'm an Aussie - our country doesn't have hardly any debt [queue smart-ass arrogance smirk]. Good fiscal and monetary policy ? Not really - as much as our politicians love to think so - it's just not over promising and over spending for political gains. "I'll give you tax-cuts of 5%" - "I'll do 10%" - "I've just discovered I can do 15%!" and so on it seems in the US - then the whole country argues about whether tax-cuts are better or worse or giving the wealthier socioeconomic bracket more money is better or worse. I don't premise to understand the entire US Financial or Political system - I'm merely an international observer. What you can observe - large socioeconomic cuts to fundamental social welfare results in those scenes unfortunately unfolding in London. You rip apart societies most vulnerable social fabric and it's not going to respond happily. To suggest we are heading for another "dot-com" boom - at least in my opinion - is totally unfounded. The internet is in another era juxtaposed against the 2000's with widebroadband adoption and reliance. IPO's are not finished when they are based on real fundamental revenues and profits underlined with good talent. Any rational investment is unpinned by this - Facebook would still raise a huge IPO - because large financial institutions still have huge funds available to them and see the rationality of the investment. Similar to other business' that have real revenue and real values. Solid business basics win as per Warren Buffet "Be fearful when others are greedy, and greedy when others are fearful". Convince investors to be greedy in the current climate and nothing matters. You'll win.

6ren 15y ago

Note: pizzas boom in recessions, substituting for expensive dining.

fosk 15y ago
This is true, it's not recession for everyone and there are great opportunities in winter as well. If you make a compelling product that gets traction, there's no reason to not get some money. It's more challenging, but I mean it's ok, it's part of the game.

trevelyan 15y ago

Winter is icummen in, Lhude sing Goddamm. VCs stop and angels drop, Like aggregate demand.... Sing: Goddamm. Downcast brow and skittish DOW Show profit on the lam Suster shivers, Techcrunch quivers Damn you, sing: Goddamm. Goddamm, Goddamm, (and Groupon's canned), Goddamm, Watch Pincus do facepalm. Sing goddamm, damm, sing Goddamm. Sing goddamm, sing goddamm, DAMM.

vynch 15y ago
lol downvoting this must feel really good!
- trevelyan 15y ago
  I was pretty pleased about working "the winter's balm" line into that bit about Zygna. And there were a couple of upvotes early on, but I guess meta jokes about English literature don't fly on a hacker audience.
  - vynch 15y ago
    on a serious note...i dont really think this particulat post is that bad...but encouraging such posts can turn our beloved community into reddit!

porterhaney 15y ago

You can't go skiing in the summer. It's easy to be all roses in the summer time, but only the tough get to make it through winter. Should be fun!

deleted 15y ago

[deleted]

gordonbowman 15y ago

+1 just for the title

grandalf 15y ago

Check out my counter-argument: Why are startups hot now? Not because the economy is good or because the startup ideas people are having are particularly good, but because risk seeking investors are trying to shove capital anywhere they can. After the crash of 2008 lots of avenues (created by Wall Street post Financial Modernization Act) to invest this capital were closed, and the growth of the startup scene, particularly the NY startup scene, is a direct result of this. Couple this with a real negative interest rates and you have a nice long boom period where startups are the best thing going for investors who are getting free money (via negative interest rates) to gamble with. Why will this continue? Exactly the same reason why Yahoo is still in business and why Microsoft is still profitable. There is tremendous room for innovation, growth, and all the improvements associated with those things. Soon joe.sixpack@yahoo.com will wake up and start demanding more and more web innovation, and the void will be filled by startups doing clever, lucrative, disruptive things. I personally can't believe that anyone can tolerate using Yahoo for anything... and I'm stunned that people tolerate 2 hour battery life Android phones, Windows Vista, etc. The problems (areas for improvement) are far deeper than most tech-savvy people (such as on HN) can imagine, and the population (thanks mostly to Facebook) is slowly waking up to what it actually wants to do online. To borrow the OP's metaphor, we're in the very early dawn of a beautiful, early spring day, etc. This will occur at least until the cost of borrowing increases substantially. Also, anyone who thinks we have an information economy in 2011 will look back in a few decades and laugh.

ChuckMcM 15y ago
This is a good point, the meta comment is that post 2008 a lot of changes were put into place snd so this 'crash' has different things going on than the last 'crash'. Its this action, where the system responds to booms and busts which makes predicting the future from past events difficult at best, and completely non-useful typically. I have talked with folks who have investment capital that is 'stuck' which is to say they have money they have allocated to the 'high risk' portion of their portfolio and yet fewer options for investing it. And while YC is a startup incubator, I also see it as a VC incubator. I would expect some of the folks who are successfully investing small amounts into a bunch of companies will begin to want to make slightly bigger bets and that will push them out of YC into a more VC like situation. The original article's message that things go in cycles, and you need to be able to deal with that, is spot on. And in times of high volatility only the folks who have that sort of risk/reward profile that startups offer want to play (the more conservative investors are worried that their 'moderate' risk capital is at risk and so they double down on those bets taking all their high risk capital off the table). More startups chasing fewer dollars, means a more competitive environment. But that being said, startups take time to get from concept to launch, cycles take time to go from down to up. The absolute best time to start a company is just before the end of the winter.

hnsmurf 15y ago

I'm not so sure. I think the broader economic forces may help tech companies rather than hurt. No matter what happens, America (and the world) will still have a lot of very wealthy people and institutions. Those people need to put their money somewhere. The stock market is scary, bonds and banks don't pay anything. If you had $100 million tomorrow to invest what would you do with it? I'd start looking for startups. 10% unemployment seems bad to us, relative to our more historical 5%, but Europe has dealt with that for decades. People still buy iPhones and sign up for Netflix. Even if the market for new services is reduced by a few %, the quality of new services will more than make up for it. Rich people will still want to make money and startups will still be an appealing way to do it.

chailatte 15y ago
I would invest in gold. No hassle. No risk since every country is printing money and putting savers at risk. Doubled in price in dollar in two years thus far.
- checker 15y ago
  Gold is the safe bet, but some people like to diversify with some riskier investments.
  - kragen 15y ago
    That's a peculiar sense of "safe". The value of gold fluctuates substantially over time, even over fairly short periods of time. Sometimes (like the last decade) it goes up; other times (like most of the 1980s and some of the 1990s) it goes down. It's easy to lose half of what you invested; if you time it right, you can lose seven-eighths. The peculiar sense in which gold is "safe" is that it tends to go down just as much as it goes up; that is, it isn't subject to secular inflation or deflation.
    - checker 15y ago
      Thanks for the explanation. I guess I was repeating what I've heard from the talking heads on TV that really provide popcorn financial advice.

encoderer 15y ago

I can't say I agree with this one bit. One bubble/bust cycle does not a trend make.

Vivtek 15y ago
It's good general advice, though - you have to give it that.

sabat 15y ago

The more people say this, the more true it becomes.

wunderfool 15y ago

you should all be ashamed of the groan-inducing apologetica in these comments. in particular: timmyd is an idiot

smountcastle 15y ago

I enjoy reading Eric Ries' posts but I cannot help but be cynical about this, "Remember: in the long run, the surest way to be successful is to create more value than you capture. Remember: the truly great entrepreneurs didn't get in this to make money, but to change the world." I guess his company IMVU created value (in terms of money) but I don't see how an online social entertainment destination where members use 3D avatars to meet new people, chat, create and play games with their friends creates social value or changes the world.

michaelochurch 15y ago

It was March, then I took a nap, and now it's November. This is what you get when Republicans are in charge (and they still are; look at Congress): short, puny expansions and punishing, horrible recessions.

deleted 15y ago

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chanux 15y ago

Yeah! There's some truth to the idea of winter. But for the people who are doing it just for the sake of doing it, winter doesn't matter. Make good things. Money will follow no matter what the season is.

mise 15y ago

May I suggest a soundtrack for this article? The Doors - Summer's Almost Gone "Summer's almost gone. Where will we be, when the summer's gone?" The Doors - Wintertime Love "Wintertime winds blow cold this season. Fallen in love, I'm hoping to be."