5 Reasons Why the Recession is Good for You

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Recessions are good for startups because they foster:
Frugality, Fine-tuning, ”Family’ Values, Forerunner-status, & Fire-proofing.

We’ve been writing a lot lately about how you can steel your startup for the recession. (See links below.) Now Melissa Chang, writing on the new Industry Standard blog, offers her rationale for why a recession is a good time to launch a new company. She has one caveat: your company is small, web-based, and doesn’t a lot of capital. (This is because VCs are ninnies.)

Melissa has five main points, all true, if not earth-shattering…

1. A recession forces founders to be frugal.
2. Recessions force entrepreneurs to take another close look at their ideas.
3. Recessions lead to committed startup teams.
4. Startups get a head start. She means: starting now is strategic, because others will be chicken to do so. So this is an opportunity to seize your market position, before others show up, post-recession.
5. Recessions toughen up companies. We have to agree with her, that a “baptism by fire” will probably make you more likely to succeed.

Melisssa has been an Internet entrepreneur since the 1990’s — so she’s been through one of these R’s already and knows of what she speaks. She also currently runs an Internet incubator outside Boston called Pure Incubation, so we expect she is giving this advice often now. Read her essay for teh fullness of what she has to say about recession-benefits (and the comments it fostered!).

But for now we’ve boiled it down to the tidy “5 F’s.”

Recessions are good because they foist upon founders:

”Family’ Values

It’s true that amidst crises come great opportunities. Tell us how you plan to leverage the opportunities inherent in this brewing economic crisis? We want to write about them!

And for more on How To Prepare for the Recession:
1. Preparing for the Recession: How to Market Your Way Through It
2. How to Turn Your Revenues Up As Economy Goes Down
3. How to Prepare Your Startup for the Downturn
4. Preparing for the Recession: ‘Mahalo’ for Tips on How to Save $$

You can read more from Melissa at her blog, The16thletter.

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