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Right you've got this article why to start to start up in a bad economy
Sitting on your desk from why combinator and wow talk about a counter intuitive title
Right right especially since this is dated october two thousand eight right in the middle of financial crisis
But that's what we're ving ving into today
K is it actually tually good time to launch to start up
When the economy is well tanking it certainly goes against what you think right it does a fascinating day
It really grabps your attention right from that first line want to start to start up
Get funded by why combinator bold confident almost define it
Yeah Yeah
It's like the're saying hey
Forget all the dooming gloom were still here
We're still funding startups who's with us
That's a great point
It really sets the tone for like their whole argument
You know instead of shing away from the economic termoal
They are just anan right into it
So how do they actually back up this claim
That a bad economy doesn't equal doom for startups
Well they start by pointing to some pretty big names
You know companies like well microsoft and apple both fit during economomdodownturns
Ah ah
But don't just say look
They did it so can you
You
They don't a bit deeper than that because let's face it
It's not that simple is it
You can't just snap your fingers and become the next steve jobs
Just because there's a recession and appright
Exactly the acknowleddis that saying that a bad economy isn't a magic formula for success or anything instead they argue that the economy's impact on a startups is actually pretty small compared other factors especially like the founders themselves
So if i'm understanding this quickly it's less about all those external factors like the economy
More about the internal factors like the drive and the adaptability of the founding team
Precisely
It's about focusing on what you can control
Okay
You know they actually suggest that worrying about the economy forecast you should be more concerned with say finding the perfect co founder
Someone who shares your vision
Who you can trust to navigate the usand downs the inevitable challenges of building is starup
What do you think is more important
When starting a company
The economy or the teamy build that's a great question to ask yourself rate
If you are getting ready to launch to start up
Would you be more worried about interest rarates or whether you have the right people by your side
I mean building a company is hard work
Even in the best of times
It takes grip determination and a willingness to adapt
Yeah
You need those even more
When the economy takes dowwturn
So what does that
That apapability look like in practice the article mentioned a few potential advantages ststarting in a bad economy one that really stood out
Was this idea that technological prograph doesn't just stop
Because the economy slows down the really interesting point
Right they use the example of microsoft developing the basic interpreter for that all tear computer back in seventy five
It was the time of economy uncertainty sure
But the personal computer revolution was just taking off
Microsoft was in the right place
At the right time with the right product
It makes you think about how important timing was just esn't
It sure does being too earlier too late a company and a bad brebreak a company
Yeah
A bad ad eomomy can creopportortunithat wouldn't exist in a oman market
Think about it
When people are tightening their belts
They're looking for ways to save money
To do things more efficiently
If if 're start art is offering something that helhelps people cut costs or do more with less a recession could actually work in your favor
Exactly it's like that saying necessity is the mother of invention
Yeah
A downturn can force people to get creative define new solutions
But that can really be brebreaground for innovation ation
But what about investors
It seems like there the first ones to get spooked
When the economy starts to wbile
And the article even talks about how fickle they can be right wanning one thing one year
And something completely different than next it does
And it uses some pretty um humorous language to make that point
Yeah like there's that line about how um how last year you have to be viral
Next year you'll have be recession prooh it's funny
But it makes a serious point
So what is it about in vilbors and these economic downturns that makes them act dodifferently
Ah i think it comes down to risk tolerance
Okay
When the economy is good
They are more willing to take risks
They're looking for that next big thing
But when things gives shaky
They get a lot more cautious sure
They're more focused on preserving capital
Than you know making big best
So how do you convince an investor
That your start tups worth bedtting on
When everyone else is running for cover the article mentiones this idea of being a cockroach
Yes
That's one of the key taguways
And of course they're not talking about literally being a cockroach
Right
But embodying certain qualities
So what are this cocoroach like qualities
That investors look for well cockroach is known for being coalialities and adaptable able to survive anything and in the start of world
That translates to running a in operation
Being
Being raray y being able pipivoc quickly
When you need to it sounds like you're saying that investors want to see that you can weather the storm
That you're not going to just fall apart
When things get to exactly they want to see that you're in it for the long haall um that you have a clear vision
And that you're willing to do whatever it takes to make it a success
So you need to find an awesome coo founder
Yes
Build something people actually need and be a scrappy as a cockroach
That's right
That sounds well pretty challenging
That's not easy
But the article is an all dooming ggoing right
是的 对的
There are some definite upsides too absolutely
One of the biggest upsisis is that a bad economy can actually mean less competition
Okay when other businesses are pulling back
Can crecrespspace your appintiadadtable ststart up really gain some trtraction
It's pretty sasaying bilow so l high but applied to the start up ll exactly and in this case
You're not just investing money
You're investing your time
You're energy
Your passion
You're betting on yourself
That's a pretty powerful way get it
It leads to what i think is one of the most thought provoking lines in the whole article
It says most people won't act on this advice
They'll get scared and head back to grad school
That's what makes this such an interesting time to be a founder
It's a challenge isn't
It yeah
You're bold enough to take the risk
This could be your moment
So does a bad economy make it a good time to start
To start up
Sounds like the answer
Like most things is more complicated than a simple yes or no
But this article definitely makes you think twice about conventional wisdom
It challenges us to think critically about risk opportunity
And what it really takes to succeed
Especially when things get tough
We've covered a lot
Lot But
But before remove on
Let's recap some of the key takewaook first and foremost the success of a start up
Hinges more on the founders
Than on the state of the economy
Right
A bad economy won't do the great team
And a good economy won't save a bad one
It's about focusing on what you can control building a strong team
Developing a product or service
That people actually need and running your operation as efficiently as possible and remember you are an investor too investing your time
Your energy
Your talent
And sometimes the best time to invest is when everyone else is heading for the exit
So we've explored the arguments
The key ideas from this why commodated article
So we want a shift
Gears a bit
And explore how these ideas might apply to your own entrepreneurial journey
Ready to i have a little deeper what's do it
I mean thinking about starting a business
When things are uncertain
Can be kind of ininmidating
Know that about it
But what we've been talking about with this why combinor article suggests maybe
Just maybe those tough times it have their advantatages
Yeah
That's right we've ve been digging into how a downturn in eeomomisn't necessararily the kiss of death for a start up
It might actually create some unique opportunities
You wouldn't even ate when the economy is booming
And the article really emphasizhow how important is to be adaptable
Right
It's not just about having a great idea
But being flexible to being eldly adjust your approach as things
Things ged around you
And let's face economic landscape will they could shift pretty romantically right
How do you think that idea of adaptability applies to like your own starof ideas
It makes you think about
You know how 'd react
If you're initial plan needed to change right things rarely go exactly
How you expect them to when you're building a business
And that's where that cockroo anallogy comes back in right you
It's not about being creepy crawley
Exactly
But about being resilient that ability just to survive tough right you were building a company
What
What's specific things could you do to be more cockroach like in your approach
Yeah makes you think about resourcefulness
Ness right making the most of what you have being scrappy not afraid to you know
Get your hands rty
Exactly
It's about being iled to pive it too
Yeah
You know change direction when you need to because in a voladle economy
Those rules of the game well they can change
Overnight
You know the article makes an interesting point about how startups could actually benefit from economic downturns by offering solutions that help people well save money
Yeah
It's almost counterintuitive
But it kind of make sense
We really think about it
Doesn't it think about it from a customers perspective
When the economy strong
You're probably more willing to splurge a little by things you want but don't necessarily need
But when things get tough
You become way more focused on
You know the essentials
So if you're start up
Provides a product or service that helps people
You know costs maybe stretch their budgets further
You're actually tapping into a growing need during recession
Precisely you're offering a socused on you know are really looking tione
That's
That's powerful
It is
But even with a great product in a resilient team
You've still got navigate that world of investors right and as we talked about inveinvestors get much more cautious
When eeomy y slow down what advice does the article give about dealing with investors during a recession
It acknowledges that investors are well more risk of vers and understandabably so during a recession
But it also reminds us
That those smart investors are always looking for good opportunities
Okay
No matter what the economies is doing
How do you make your start art stand and as as good opportunity that everyone else is you know tightening their per ststrings well the article suggests you need to demonstrate that you're start up has the potential to you know not just survive but really thrive
But know not matmating ditions
It goes back to that idea of being lean efficient adaptable
It's about proving that you can weather the storm yeah and come out even stronger on the other side
Exactly
And being able to articulate your vision right clearly showing investors you understand the market
And 've got a plan for navigating the challenges ahead
Think think you
Your own start art ideidefor seconseconthink what would you tell an investor
Whose hesitdent because of the economy
It makes you think about what makes your idea really valuable
Right
What problem are you solving
That becomes even more critical during a recession
Exactly
A good investor knows that downturns can create you know disruptions opportunities for new solutions to come out and shake things up they're looking for the the diamonds in a rough
Yeah
Those companies with the potential to be the next big thing
So far
We've talked about the potential benefits of starting a business during a bad economy things like the less petition right the chance to offer solutions that save people money
The ability to attract those investors who are searching for the hidden jms out there
But we gotta be realistic
Here there are some simptty significant challenges too right
Of course starting a business is never easy and doing it during a recession just adds another layer of complexity
You're absolutely right important to acknowledge the challenges to be realistic about them
Wanching starart is is always risky yeah
And those risks are definitely higher
When the economies struggling getting funding can be harder
People might be spending less right
And there's just more incerity
Overall the article doesn't shy away from those challenges
Does it
The
It don't it keeps coming back to that core message
That the success of a start tuis really more about the founders than anything else right
A bad economy won't do ma great team
But a good economy won't save a poorly run company
It all comes down to you know execution resilience that all waivering belief in your vision
It does so as we wrap up this part of our deep dive
We want to leave a listeners with a few questions to think about okay
So if you were to launch your start today
What challenges do you think youd face yeah
And what strength and resources could you use to overcome them takes some time to really think about those questions
Think about how this why combinator article can help you navigate starting up in well uncertain economy times and will pick up this conversation or next segment so welcome back
We've been really did into this why combator article talking about how it kind of flips
The script on starting a business
During a recession
It's um
It's a lot of process
But i'm curious
What's really resonated with you so far
You know is that sense of optimism
That really comes through
Yeah
That even when the economy looks well kind of bleak
You can still build a great company
It is pretty inspiring
Especially given that this was written right in the middle of two thousand
Thousand financial crisis
Yeah
You know they weren't just talking about it
They were out there doing it right funding startups
Ps
A lot of people were freaking out
And that really said something about their philosophy doesn't it that whole downturn didn't change their belief
That innovation keeps going yeah
How tough things get yeah
Ah they've even point out that some of the biggest
Most successful companies out there actually started during some pretty tough times
You know microsoft
Apple they were founded
When the economy was booming
It makes you wonder
If those challenges actually like fuel creativity and resilience in a way
When you don't have a lot of resources and the stakes are high
You forced to be more resourceful
More focused
You know more determined
Almost like a pressure cooker right
Sometimes you need that heat that pressure to create something truly well amazing
Exactly
And i think that's what this article challenges is to do right to see the opportunity
That's hidden in all that uncertainty to really embrace the challenge
And use it to fuel innovation
Yeah
The article doesn't give us like all the answers or any guarantees
But it does give us a new way to think about startups
It pushes you to ask yourself some tough and questions like what are you really passionate about
Yeah
What problem are you trying to solve right
And are you willing to put in the work to be adaptable resilient to build something that matters even when
Even
Even when the world feels like it's fallen apart
It's about changing your perspective right not seeing your cession is a dead end
But maybe a chance to launch something
Knew something innovative
Because the end of a day a start up success isn't tied to you know a stock market
Market ter the unemployment
Right right
It comes down of the people behind it
Their vision
Their drug
Yeah they're willingness to embrace the unknown and really make something happen
And that's a message worth remembering no matter what's happening with the economy definitely so as we wrap up this deep dive
We want to leave you with this
Don't let fear hold you back
Embrace the uncertainty go after what you're passionate about
And remember even in times are tough
Innovation can still take rout and flourish
Thanks for joining us on this deep dive
We hope it's given you some things to think about and a fresh perspective on the world of startups
And remember even though our deep dive here is ending your own deep dive into the world of startups
Well
It's just beginning
