Comments on: The Newest New Economy for Entrepreneurs

By: Joe Panettieri

Joe Panettieri — Wed, 25 Mar 2009 15:17:13 +0000

Paul: I like your logic but I’m certainly biased, since young media companies tend to be pretty nimble…

By: Paul barnett

Paul barnett — Wed, 25 Mar 2009 13:49:39 +0000

Past economic shifts have shown us that startup companies tend to have the upper-hand since they are built from the ground up to be lean and mean. Larger existing companies have a tendency to become bloated during the good economic times. This always haunts them when things slow down. They end up devoting time to leaning out the business rather than building it – advantage small company. The small startup, in most instances can take advantage of the large company being stuck in mud. We see it time and time again. Small, innovative, and light on its feet company comes out of nowhere and scores.

Paul Barnett
Marketing Director
VirtualAdministrator

By: Joe Panettieri

Joe Panettieri — Tue, 24 Mar 2009 14:51:18 +0000

Brian: I think we’re seeing some shifts on the funding front, too.

I’m hearing from more and more people who (A) initially pursued funding but (B) ultimately decided to self-fund because of tight credit markets and (C) are happy the situation worked out the way it did.

The reason: Self-funding can make companies more innovative because they are watching their own dollars and always looking for affordable alternatives to traditional business solutions. Plus, self-funding = freedom/control.

Of course, that’s only one side of the story. There are plenty of positive reasons to pursue funding.

By: Brian de Haaff

Brian de Haaff — Mon, 23 Mar 2009 17:22:13 +0000

I am not sure the rules are any different.

1. Solve a real customer problem or create a new opportunity for them
2. Address a massive market
3. Rapidly refine

The major difference is that capital is much more expensive than it has been in the Internet era (figure that $1 a year ago is now worth at least $1.5, if you have it). There is much less of it and no one wants to part with it. Series A now looks like an Angel round in terms of the amount being raised (and Bs are looking like As)

So, in terms of capital, the world has changed, which means companies must.

1. Prove the technology works and can scale
2. Prove that customers will pay for it (and increase their use of it)
3. Prove the market is large
4. Prove a highly efficient and repeatable acquisition model

The last point is critical and explains why traditional enterprise software and feet-on-the-street sales models are dead. There is no “reset” taking place, companies are just focusing on what’s important.

The companies that are disrupting traditional enterprise software markets with on-demand services are the new economy.

Brian de Haaff
CEO
Paglo (On-demand IT Management)
http://www.paglo.com