VentureBeat

Time to ask your VC how he is doing.
And when he needs the money back.

nice scoop eric ;)

(but i am getting a little tired of all the negative vibe everyone is reporting on... jesus)

I'm with you there. I'm really getting pretty bored of the negative vibe. For a lot of us entrepreneurs not much has changed. We still need to focus on being lean, fast and focused -- create value for users and find revenues. Things are going to be tough?! No shit! But the odds were already stacked against us.

I think that this down turn will favor those that can shift their marketing to touting the benefits of their product to create NEW revenue from an existing market base. Time to dump the developers and hire a marketing person.

Michael Kassing
MarkTend.com
(yes, still making money)

Oh, that's a great idea. Don't actually create new value. Just talk a good game. That'll get us out of this mess. Genius.

MC,

I am not trying to get US out of this mess, I am not in this mess. We don't just talk, we create, we made new value in existing relationships. How about you?

Michael
MarkTend.com

Yikes, little lady. . .

How about leaving the self-promotion at the door? MarkTend is a derivative idea, executed in mediocre fashion, and hasn't survived a downturn long enough to give you any insights worth considering. Save your prattle and posturing for 18 months from now, when you have a real track record on which to lecture everyone else.

I like your presupposition that we will be around in 18 months, I will take it.

I like how you didn't deny the "derivative idea, executed in mediocre fashion"

good insight!

Nothing new there, but good their getting the word out to those who were in the startup/VC world during the previous recession, if you can even call it that, it was short and shallow and credit and housing bubbles inflated it away (for a while).

I have been business firefighter my entire career. Heading business operations, keeping those burn rates low, helping founders keep the lid down on spending, and focusing on investing in the right R&D. When times are good, so many would not see the value in operations experts. Now that the times are bad, they start listening. So yes, I have seen this uphill battle, no revenue but huge spending, and etc. etc. etc.
The smart ones align themselves with people who will keep them out of the fire.
There are so many fantastic startups with great products and services I see almost every day. And almost every day I hope they keep (or get) themselves grounded and look at every penny and where it goes.

Just my humble 2 cents.

Apolinaras "Apollo" Sinkevicius

They are totally correct. It's just a little stunning they didn't consider revenue streams so important last year. In the same way banks thought these mortgages we're fine to absorb because home values would keep going up and thus more mortages could be taken out, the VCs were thinking start-up values would keep going up and they could keep getting more money. I don't fault them as that is how their industry goes, but I just hope no one is surprised.

But what's done is done and the future is what matters. I think the next two years will be a boon for Internet entrepreneurs and angels and I just blogged why at the Dogster, Inc. company blog.

I love the death spiral slide.

This was actually really helpful. I think the solutions they presented should be part of all startups anyway but the snapshot of what's next was probably one of the only realistic looks at what will probably happen in any published media I've seen.

i think this is a great buying opportunity! I wish that store woolworth's was still in business. I would buy stock in them...they were my favorite store. my mama always took me there and she called it the 5 and dime. Oh! memories.

i agree. silicon valley always kicks ass in bad times, it's when people do their best work and come up with their best ideas. this is classic bait and switch to reduce valuations for first rounds.
wall street is going to be slobbering like a pack of wild dogs to buy in to the next wave of startups, just like they did in the 90s during the last recession.
like mine.
bluk.me sequioa.
i'll be waiting for your call...
cheers.
rb.

Thanks for sharing this - I'll pass it on to our Startup Rockstars group to help them focus correctly in the new paradigm. Or, maybe it's a repeat paradigm. Nobody really knows yet.

Labor costs will be going up and new regulations. Seems like the kind of environment that automation, tech and software will thrive in.

Funny how much easier these things are to explain after the fact, eh? :)

This is BS! A tactic used to highlight the Powerpoint sharing service! Put your docs in the cloud. Use viral marketing.

Huh? I'm not following what you mean.

Sears grew every year during the Great Depression, founded its Alstate Insurance division and stayed health through out. It was only during the excesses of the '90s and '00s that their customers decided they were too good for them and they had trouble.

Interesting lesson.

So these guys/gals at Sequoia are supposed to be the smart people, huh? And all they can come up with is "be ready for tough times?" Everyone is jumping on the gloom bandwagon. Even a fifth grader could tell you that right now... and these guys are supposed to be selling their "management expertise" to companies they finance. Some of the economic data from govt. sources was interesting, butyou would expect something more than just after-the-fact analysis... where is the long-term perspective (such as the nation's GDP almost doubled in the last 10 years- that's a growth rate of 7.2 percent! OR their analysis that increasing productivity led to inflation - I thought more productivity is a good thing!) While these guys are getting ready to tighten funding, Mr. Buffett is taking advantage of good values to invest in companies with strong fundamentals.
Then again, these guys were never interested in creating long-term value for shareholders. They fund companies to grow very fast in a couple of years, then deploy and EXIT STRATEGY (sell & run with your money). Vastly different from Buffetts approach to long-term investment that supports foundational economic growth - he incentivises his Exec's for long-term performance, no option grants etc...
This presentation just reinforces my view that valley VCs are successful only because of the large amounts of capital they control and the relationships they have - its like a mob/cartel (how hard is it for a VC to say: lets ask Google to buy YouTube, both funded by the same VCs). For every Google created, there have been hundreds of startups & IPOs in which investors have lost large amounts of money.

VC knew they win some and loose some. There is nothing new.
IMHO, the Web 2.0 will implode like a great ball of fire. Some how these people think the US can just surf the web and rely on China to make things and money will just flow to these website. We borrow on credit to live beyond our mean. When does people realize that these web sites (facebook, youtube, myspace, etc.) do not produce anything. Stop put money in these holes and start invest in real things.

Did these VCs admit their mistakes and false judgements?

I like these times. In 1992, I started my first company, seems we were in a recession then....and I never had time to relax and we did well. In 2001, I started another company and sold it in 3 years. Now we are focused on our next big thing...and IMO, these are the times that the great leaders shine........the guys who talk up a good idea but can't execute, are going to suffer, because there just isnt enough cash to support them too.

I like these times, because americans are most forward thinking at these times. Watch the next 10 years produce some of the most innovative solutions the world has seen.....hell, 2001 and mobile explosion is really just the start. Hang, its going to fun!

Now seems like a great time for a "how to survive a recession" consulting firm. That is a proposition that the market is ready for.

Thanks for sharing this - I'll pass it on to our Startup Rockstars group to help them focus correctly in the new paradigm. Or, maybe it's a repeat paradigm. Nobody really knows yet.

.

Thanks for the helpful video. Times are tough but many small businesses can survive through this recession if they take the appropriate measures.

This video make total sense. I think the firing of so many people on the job market is one of the problems, personally, I think it has to do with others helping others. The people make the economy what it is. If you don't have a job then you can't buy anything. Businesses need to be more innovative and constructive!

The presentation is the best summary I have seen,thanks

It seems Sequoia Capital are panicking.

The message I take away from this presentation (sent to their ’portfolio’), is this: they believe that they have invested in badly run startups, who had no forethought, business plan, revenue stream or ability to read the news.

Hmm.. maybe they should go back to VC kindergarten, or use crayons in their next presentation. I did like the third slide though - was that Sequoia Capital’s CFO...?

The presentation is the best summary I have seen,thanks

Now seems like a great time for a "how to survive a recession" consulting firm. That is a proposition that the market is ready for.
http://www.uggboots365.co.uk

I agree, things are tough right now. Tougher than they have been in a long time, but we have to adapt. We just have to keep pushing forward.

Thanks for the valuable tips and advice. This is period of learning and businesses must learn to adapt to this time of recession.

good time.good post