|By Jeremy Geelan||
|January 21, 2009 09:15 AM EST||
Two days before the single largest drop in the history of the stock market, Jason Calacanis - former Weblogs Inc. co-founder (and GM of Netscape) - wrote a lengthy blog post aimed at inspiring folks at startup companies "to get focused and to save as many as possible from hitting the wall." As Calacanis reminded readers of his blog, "Great entrepreneurs build value and market-share in down markets."
We recently asked a selection of the industry's brightest minds what their own advice would be in these troubled times, and assembled it into a ten-point guide for software vendors, entrepreneurs, and startups to riding out a recession.
Tip #1: Prioritize Harvesting Existing Assets and Opportunities
This comes from the Jeremy Chone, CTO of Nexaweb Technologies, a VC-funded software provider that offers the industry’s most comprehensive application platform for mission-critical rich enterprise web and desktop applications.
Chone's recommendation is as follows: "Prioritize harvesting existing assets and opportunities over generating new ones."
A seasoned software executive with more than 10 years of technical and business experience in major software companies such as Netscape, Oracle and Adobe, Chone joined Nexaweb from Adobe Flex where he was director of product management and strategy with responsibility for defining product strategy and creating a roadmap to help Adobe establish itself as the leading Rapid and Rich Internet Application platform provider.
Tip #2: "Plan for the Worst"
Mitchell Kertzman, of San Francisco-based Hummer Winblad Venture Partners, is adamant that "In this environment, cash is king." Accordingly his advice is harsh but realistic:
"I would plan for the worst – if it turns out to be not as bad, you can always hire and grow, but if it turns out to be as bad as people fear, you won’t be able to get back the cash you overspent."
Kertzman - a Managing Director at Hummer Winblad and who founded and was CEO of Powersoft, which merged with Sybase in February 1995 - acknowledges that every company is different, of course. "If you have customers, product and a repeatable business model," he adds, "I’d just be conservative. If you haven’t got any of those three, I’d hunker down to make sure you survive when the market develops or returns."
Tip #3: "Focus on Helping Your Customers' Bottom Line"
Another industry veteran, Jnan Dash - now Chief Strategy Officer of Curl, Inc. - insists that nothing matters more right now than for a software vendor to be able to answer the question "What are you doing to reduce my TCO (total cost of ownership) - to help my bottom line?"
In Dash's experience, the most common thing said during a recession is as follows: "Don't give me all this 'cool technology' b-s." and "I am not looking for solutions looking for problems, thank you." So software needs to be demonstrably valuable to the company investing in it, or being asked to do so.
Tip #4: "Get Revenue Control"
Chris Keene, now Chairman and CEO of WaveMaker and formerly the founder of Persistence Software (sold in 2004 to Progress), says that he used to have a CFO who liked to say “we have no problems that can’t be overcome with more revenue.”
This advice is something he passes on in these turbulent times:
"Although cost controls are important in a downturn, I believe it is even more important to get revenue control. This requires a very tactical approach to staying alive through a few strategic deals."
Keene then zeroes in on an action plan that will resonate with anyone and everyone reading this article:
"What big strategic deals can you personally close to keep your company afloat? What professional services engagements can you sign to help pay for your staff? Who are the customers who are most dependent on you and how can you team with them to deliver concrete value to them while continuing to evolve your product."
See next page for Recession-Beating Advice from Jeff Haynie, Founder & CEO of Appcelerator; John Crupi, CTO of JackBe; Anthony Franco, President of EffectiveUI; Chris Heidelberger, CEO of Nexaweb; and Jason Calacanis, former Weblogs Inc. co-founder (and GM of Netscape)
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