While aimlessly surfing the world wide web, I stumbled on a fascinating essay by Paul Graham called “Why to Start a Startup in a Bad Economy”. Paul Graham is the founder of the prestigious startup incubator YCombinator which counts Stripe, Dropbox and Airbnb among its alumni. The essay was written in de midst of the 2008 financial turmoil which makes it very relevant again today given the current sanitary and (probably) financial crisis.
In 2009 Paul Graham became the first investor in “Air Bed and Breakfast” (Airbnb) through YCombinator.
Three of my take aways from the article:
“What matters is who you are, not when you do it. If you’re the right sort of person, you’ll win even in a bad economy. And if you’re not, a good economy won’t save you.”
Blaming a bad situation is always easier than taking a look in the mirror. When Paul talks about “the right sort of person” what he’s really referring to is “the person” as in founder/co-founder. I believe that if you are thinking about launching a startup, the current lockdown is the perfect moment for introspection and figuring out if you have what it takes or/and to start looking for a complementary co-founder. On top of that, in this digital age the ability to acquire new skills is far more important than purely talent in my opinion. Me myself, I have already taken up online growth hacking classes and… Spanish, for obvious reasons :).
“If you have a specific idea you want act on, act now.”
This is basically a note to self. I always have ton of ideas but very few eventually see the light of day. Ideas are cheap, and now is always the best time to get started. This is always true but especially NOW NOW!
“Fortunately the way to make a startup recession-proof is to do exactly what you should do anyway: run it as cheaply as possible.“
Now that excess of VC money will probably be dried up, I hope we will start to see startups that solve big problems and have viable business models, unlike the type of WeWork companies we saw in recent years. When Airbnb launched in 2008, their founders had to sell cereal boxes for the Barack Obama and John McCain campaigns, in order to raise capital. Airbnb were forced to be run as cheaply as possible since there was very little investing being done at the time. What kept Airbnb alive is not money, but the conviction of its founders who had a massive transformative purpose. In 2016 the company became profitable.
Looking around in my own social circle I already start to see people who are not only profit driven but also purpose driven. Let’s hope it’s a sign of the times!
Thank you for reading, Benoit Baervoets
This is the link to the original article: http://paulgraham.com/badeconomy.html
PS: I have been following Paul Graham (@paulg) for a long time on Twitter and his wisdom is definitely worth checking out (if you’re interested in either startups, tech or VC)
PS2: While you’re there, you might as well follow me (@BBAERVOETS)