Startups and Silver Linings: Insights from a WTIA Forum Panelist
I had the pleasure of attending the 2009 WTIA Tech Showcase Fast Pitch Forum yesterday. I was one of four panelists tasked with listening, reacting, and asking questions of the 23 Seattle-area companies that each had eight minutes to present. The day was divided up into six one-hour-long sessions, and I’m ashamed to admit I missed the last two sessions because I had some other meetings in Bellevue that I had to attend. However, after listening to 16 companies spread over four sessions, my brain was overflowing with new info and thoughts, so I’m not sure how much value I would have added during the final two sessions.
In a nutshell, I was very impressed by both the content and the form of the presentations. The presenters did a great job of condensing their pitch into exactly eight minutes. What also struck me was that despite the slow economic times, most of the companies were doing well in the marketplace. All of them had growing customer bases and rising revenue, and many of them were hiring.
It is a hackneyed phrase, but it is true—economic downturns are often the best times to build a startup company. In the chaos and confusion of turbulent times, there always lies opportunity. As industries change and contract, the marketplace is ripe for new solutions. Because despite the negative headlines in the media, people are still going about their daily activities and living their lives, and there will always be opportunities for new products and services, and for new technologies that reduce the cost and increase the efficiency of existing products and services.
Two examples in Seattle are Redfin and TeachStreet. Redfin is an online real estate brokerage. As we all know, the real estate industry nationwide is in a major slowdown. However, Redfin continues to experience strong growth, partly because I suspect that during tough times, people enjoy using technology to make their real estate deals a higher quality experience, not to mention a more efficient and cost-effective transaction.
TeachStreet was also interesting. They have built an online marketplace where people who want to learn can connect with the best teachers and classrooms; and where teachers and tutors can find students and clients. They also are growing nicely. During slow economic times, many folks want to learn new skills (either for professional or personal reasons), and many experts have more time on their hands to provide teaching services.
That being said, I’m sure everyone in the room today would rather the economy was growing at a 3 percent rate as it did from 2002-2007, as opposed to shrinking dramatically as it is this year. However, many of the 23 startups that presented yesterday will emerge from this recession in strong shape and will be well-positioned when the economy starts growing again. I was an active VC investor before, during, and after the dot-com crash of 2000 and the telecom meltdown of 2001. Many of today’s most successful startups were founded during those dark days, and as Tim Draper noted during his lunch speech, many of today’s biggest companies were founded in prior recessions.
So hope springs eternal, and I won’t apologize for finding silver linings in the current clouds.