About nine months ago, my business partner and I both quit our full-time jobs in Boulder to start a Web 2.0 company that builds social features for blogs. We had no funding, no office, a few customers, and operated the company from our savings. We both have families to support, mortgages to pay and college educations to save for. What person in their right mind would quit their job during the worst economy since the Great Depression?
Starting a company in the middle of a recession certainly has its challenges. Funding is hard to come by and investors are gun-shy. It's tougher to get loans and skilled employees who have jobs are less likely to leave for riskier ventures. Consumers have less money to spend on products and are very selective about what they do spend money on. While all those things might be true, with tough times comes great opportunity. There are pools of extremely talented people who are looking for work and willing to take below-market salaries to join a great team. Employees are more flexible about relocating, work hours, and job sharing. Commercial property rates are lower and the cost of travel is down. The challenging economy also means fewer companies will start new ventures, which results in fewer competitors.
From a product perspective, a tight economy and skeptical investment climate forces you to be ruthless in your product development. You don't have the luxury of going in ten different directions and chasing features that are cool but way outside your core vision (we call those "bright shiny objects"). If you spend one day on something that doesn't further the goal of solving your customers problems, you have wasted precious time. Competitors with more money and resources will eat your lunch if your take our eye off the ball for a minute. And we wouldn't have it any other way. We are conditioned to think fast, test often, be brutal with priorities and involve feedback from real customers every step of the way.
We still don't have a fat budget, fancy office or corporate salary. What we do have is a customer base of over 20,000 customers that grows every day. We launch features in weeks, not months. We're able to advance swiftly in a market where others have retreated with a wait-it-out mentality. We are making significant progress and have overcome hurdles with customers, investors, and competitors. We're even driving revenue sooner than we thought we would.
Being forced to play by recession-era rules is good for our business. Our gutsy move is paying off and we're months ahead of where we would be if we'd played it safe and waited. Sometimes what looks like a challenge is really fate handing you a lottery ticket and inviting you to play a bigger game.
Follow Holly Hamann on Twitter: www.twitter.com/hollyk