Wednesday, November 19, 2008

Recession Business

Now that we're in a recession, are entrepreneurs supposed to alter their business model towards those that drive solid revenue streams?

I think most MBAs would tend to think so, but I'm reluctant to agree just yet. I mean what are the differences between a company which doesn't consider change regardless of a recession or not? Chances are that the company will be poor and bootstrapping anyways, so no difference there.

Secondly, granted investors are more enthusiastic about self-sustainable startups in general, I would also argue that the time it takes a startup to develop and fully go to market is about a third of a crisis cycle. This then means that starting a company with a longer-term model may position it for the upcoming bull run as well.

Furthermore, I'm under the presumption that businesses with longer-term models are more difficult to clone.

The difference between a product focusing on eyeballs and IP is also an interesting one. It's like the difference between games and web people or building a Tetris clone and Harmotion (or Okami, Mirrors Edge, etc...). On one hand, developing Tetris provides a defined product and install base (instant eyeballs): on the other hand, a new IP allows for creating a new market (more upside at the cost of accumulating users one at a time.)

But what about Puzzle Quest (the bejewel x RPG)? Can that be the best of both worlds?

1 comment:

Anonymous said...

i agree your idea ! very nice blog