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Crisis is an opportunity to grab huge markets
Tim Draper, Founder and Managing Director of Draper Fisher Jurvetson, shares with Reena Jadhav, CEO nuResume, his perspective on the impact of the current economic crisis on venture backed companies. Bottom line: this is a crisis you can take advantage of and an opportunity to grab huge markets!
He draws a clear distinction between the current economic crisis and the 2000-2001 downturn by saying that while the last downturn had us firmly at the center of the vortex, this time we're collateral damage. That translates to vastly different strategies for survival. Then, we were asking CEOs to layoff everyone in the company in order to survive but now we're asking companies to take advantage through re-direction or growth.
One factor driving differing recommendations is that now companies are running tight, they do have cash and might even be cash flow positive. Here are some tips for entrepreneurs:
- Do those things you wanted to do anyway - such as letting certain people go
- Redirect your business to take advantage of this opportunity
- Scale back if it means staying in business or consider a whole new business based on this opportunity
- Crisis like this flattens the whole economy giving rise to new businesses and new ideas that will pull it out
- There are opportunities now for individuals to grab huge markets
- View it as a unique opportunity rather than a problem
So what does Tim think will pull us out of this economic downturn?
He believes that the new Obama administration will lfocus on a feww specific areas of healthcare, clean tech and unions. So entrepreneurs in these areas will certainly have an advantage.
In IT or communications, a natural next step is for social networks to get adapted into corporate networks, presenting an opportunity there.
The emerging world of iPhone and Blackberry provides a great new platform for software designers to design to and build new applications.
He's enamored and remains bullish on the electric car.
Watch the interview on his take on why we won't need gas stations and how it relates to the dinosaurs!
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