Thanks to Kevin Erwin for sending me a link to the Time.com article entitled The New Internet Start-Up Boom: Get Rich Slow. I have been meaning to write a post highlighting this article for several weeks because I couldn't agree more with its thesis.
Everyone knows the motto "buy low, sell high." And yet, most people do the opposite. We buy more real estate, stock etc when things are "booming" and we sell when things seems to be going South. This precise madness is why most people don't make squat on their investments and why most people think this is a terrible time to be starting a new venture. I am going to list 5 basic reasons why there is no better time to jump-start a new venture.
1. Commercial rents are dropping. Lease costs can be a significant line-item for an early stage business and they are lower now than in anytime in recent memory...and dropping more every month. Buy inventory (square footage) when it's cheap.
2. Labor is cheaper than even a year ago. Software Developers, for example, who thought they were worth $150/hour a year ago can be hired for less than $100/hour in most cases... and $50/hour is adequate in many cases. If not, there are plenty of options using the likes of eLance, offshore etc.
3. Larger companies are not spending on R&D. Small company acquisitions become their R&D. Build. Sell.
4. Technology enables virtual teams and more lightweight infrastructure. We ditched Microsoft Exchange for Google Apps for example, and our diminished support costs and separation from a reliance on hardware are two worthwhile benefits.
5. If you are standing at the other end of a recession...you win by attrition in many cases. Let your bloated, slow competitors with a lack of creativity fall prey to the economic climate.
BUY LOW, SELL HIGH!
