The economy sucks! Our financial system is crumbling due to faulty government intervention and uncontrolled spending. Recession is looming.
That was the last you will hear of me rant about the “down” economy, because negativity is only going to get us so far. From this moment forward, it is now the “New Economy” in my mind. I’m completely over what has happened in the past, and am looking forward to a new White House, and a new economic system to tackle the mess we are in now.
So how will this “New Economy” affect the world of start- ups? I am a firm believer that innovation will ALWAYS win out. That isn’t necessarily a prescription for guiding the next 6 months of change, but creativity and smart business people will always find a way to shake up a stale business period.
It’s no secret that green ventures and biotech will continue to grow. From both a social and economic perspective, these are business channels that are both in need and have potential for development. Outside of those categories, a new business will need to show solid plans for revenue generation, which may seem tough over the next 6 months. However I do truly believe that originality can prevail. And I believe there is always space for an idea that is either brand new, or is a modified version of something everyone takes for granted.
The online ad space will be a very interesting place for investors. The double edge sword of marketing is that ad budgets are the first to be cut in an economic downturn. However, it also means that offline dollars get shifted online where rates are cheaper and accountability is more prevalent. Web start-ups should theoretically be flourishing in this “New Economy” because you will be hard pressed to find a middle tier advertiser looking to spend $2 MM in television for 5 thirty second spots. That same budget can be taken online and be diversified over the course of a few months. And it can go towards emerging media channels, like mobile, online video, social media, etc. Places where consumers are turning for their most prized content.
All in all, I’m legitimately excited to see where the next 6 months take us. in terms of venture capital dollars, the economy as a whole, and for emerging media, there will be lots of changes and I’m interested to see it all play out.
Friday, October 3, 2008
Innovation vs. “New Economy”
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Love your positivity. Those who do buy in to the panic bring everyone/everything down with them. Keep singing your song, keep looking for creative ways out of the slump, keep thinking, keep twriting.
ReplyDeletetwriting is hard to do. Just keep on writing!
ReplyDeleteWe seem in the US to go from point A to point Z, find ourselves in economic trouble, and then wonder how we got there. what happened to points F or J.....at Z already? Well, it takes time and more than a few individuals from a few different administrations.
ReplyDeleteWe have economic crashes every few years always precipitated by an economic 'event' dreamed up by some Wall Street brainiacs. And they can dream up these schemes because Wall Street lobbyists have managed to tear down yet another system safeguard by sending some Congressman's daughter to Harvard or some such perk.
The last vestiges of the regulatory patches to the famous market crash of 1929 were eliminated in the past 15 years....that's a few adminstrations. The Community Redevelopment Agency was mandated in the late 1990's to help lower income folk get homes. The sub-prime Wall Street geniuses of the early 2000's finished that job....and all of us.
The REAL devil in all of this latest upset remains the hoaried Standard & Poor's rating service. As old as Wall Street itself, S&P was supposed to be the last defender of the good and true. Absolutely everything that has happened in the mortgage mess could have happened without it being a world-wide phenomenom. Mortgages could have gone under, mortgage companies could have failed, people that invested in those investments could have lost a bit. And it would have been localized as this business and investment area had always been.
What spread the infection world-wide was good old S&P being convinced, for $15 million a pop, was that this garbage was worthy of a AA rating, almost up there with good old US Treasury paper. So for every billion dollar mortgage-bond package rated, they got $15 million and their rating allowed the packages to be sold world-wide.
And that's why the Italians and French and everyone else are suffering from lousy mortgages in Arizona and Texas....
And that's why