Doug Richards opened by saying that statists show that downturns are the best time to launch new startups. Sadly it is also not a fantastic time to exit them. We never seem to get both of those coinciding. This means you either need cash or revenue you tide you over, so you are probably well off if you are into mobile advertising revenues right now.
The company presentations were all about mobile, which was not my personal space, but the interesting points were about the sudden dramatic phase change that has occurred in mobile:
Operator centric User Centric
Network controlled Open
Data = Pay by volume Flat rate or Free
No user engagement Strong interactivity
Fragmented / Silos Open, collaborative
Specialist developer talent Simple toolsets
This phase shift is making lots of mobile start ups profitable or able to prove their commercial models much faster than they ever could before. This is good for developers and content creators.
The panel session followed, and it talked in very light hearted ways about the means of turning the Crisis into an Opportunity.
While I never understood Beanz, Charles seems to have done well on it. The key points of the panel were:
Raise finance if it is offered
Focus on raising revenue – focus on the top 5 things you can do to deliver revenue and ONLY do them
IF fund raising, get the commercial proposition right, worry about the valuation later.
Investors who decide to meddle out of panic are totally unhelpful – the right thing to do is to “double down” and focus on getting to revenue faster. Stick to your knitting, no new plans, no sudden changes of direction
If you must ask for cash in 2009 – Restate your business plans, so the investors know that they are in for £x on fixed conditions which you will then be able to meet.
Fail Fast – if it does not work, stop doing it.
If you must cut – make sure it is for strategic reasons and done well
This is a great time to hire – downward pressure on salaries and more mobile workforce right now
Becoming cheap is a good brand value in a recession – micropayments or cheap packages or subscriptions that go “under the radar”
Export – exchange rates are your friends right now!
Use your smarts – big companies are cutting R&D spend, so they need to buy innovation
Stop using silly company names as you cannot afford to advertise them right now
Grab market share while your competitors are busy worrying
Quick Tips for Entrepreneurs?
– Content is king
– Bank more cash
– Strong balance sheet
– Focus on top 5 things
– Temper your enthusiasm
– Only the Agile Survive – Darwin was right, dinosaurs were wrong
Why are your VC’s not investing?
– your idea is not a good one?
– -they are investing, but it takes longer right now
– they are supporting their existing portfolio so it does better than competitors (I would call this “the Lastminute.com strategy”)
– they are worried about raising money in 2009 so are cautious right now
– it is cheaper to buy listed companies on their low P/E right now (so money not going into VCs)
– it is the low P/E means that savvy CEOs are not offering their companies up for fund raising.
What sectors are hot?
– Music – massive disruptive tech surge just coming
– Classified ads – driven by social change
– The Financial Sector
– Mobile Consumer Apps
– Tech Stuff in China