[Special crisis edition] Market crash, economy shutting down! Is it a good time to start preparing for a startup?

What is common between Microsoft, Apple, Uber, Airbnb, Slack, Dropbox? All were founded after a financial crisis.

Answer: YES - as long as you stick to the fundamentals of any business - customers, cash and profits! 

(Vote your answer at

or https://www.facebook.com/groups/beforeyoustartup/ )

‘Crazy’ - this is one word to describe last week. Stock market crashed big time, Coronavirus is spreading fast, malls and restaurants are closing down, people working from home. 

Oh - and not to forget, the oil prices crashed. Two black swan events in one week!

First - stay safe! This is serious. Err on the side of overreaction. Don’t do stupid things.

Second, this will hit each of us in some way. Economy will slow down, we will lose money in the stock market, job losses might happen.

Third, things will improve at some point finally. This is NOT permanent.

So is it a good time to start preparing for your startup? Absolutely!


Because this situation will help you by opening up choices on:

  1. More co-founders and talent will be in the market: With ‘good days’ in cushy corporate jobs gone and some startups shutting down, more people will be available to take risks (or they might not have any choice!).

  2. More ideas will open up: You will see a lot of churn. Startups with good ideas will shut down. New fundamental shifts in customer habits will happen. 

  3. You will have more time to build: As everything slows down, you will get more time to validate ideas, talk to customers and make right long term decisions. Less FOMO and less ‘raise money ASAP syndrome’!

AND this situation will help you by putting constraints on:

  1. You won’t get a lot of cash to spend: Too much money too early is not good for long term success. When cash is constrained, you think twice before hiring a new engineer, or adding a new feature, or taking that new office space, or launching a new ad campaign -- you make more thoughtful decisions by eliminating waste.

  2. You can’t make a ‘crappy’ product: Customers won’t pay for anything ‘extra’ or ‘crap’, or ‘non-critical’. The bar for your product will be way higher and that’s good!

All this means: You have to focus on the basics of your business: value to a customer, team, cash and profits… and that’s a great recipe for success!

If you ever wanted to startup, this is a GREAT time to start preparing.

So here is today’s question for you: 

How will this situation change your life for the better?

And here is one challenge for you:

List down all the things that were hard to do a week ago, but NOW have suddenly become possible to do.

My list is: Spend more time with kids, buy some stocks and devote more time to writing.

Read more on startups and bad economy by Paul Graham.

Keep moving ahead!



Twitter: @pango

Facebook: https://www.facebook.com/groups/beforeyoustartup