Innovator’s dilemmas: can you be bullish in a bear market? (3)
“Financial uncertainty forces efforts to be streamlined. This is often when the best concepts arise as great innovators are excited by and step up to challenges.”
“In the wake of the popping of the Internet bubble and the even-bigger telecom bubble that the level of growth and innovation in both those sectors has assumed remarkable proportions.”
Read Robert Buderi’s article, “What does the financial crisis mean for innovation?” on Xconomy.
The credit crunch makes it difficult to rise funding and the cost of capital has gone up anyway. Most entrepreneurs are rethinking their budgets for 2009. Timely action and creativeness can help things keep going. However, rushing decisions just aimed to cut costs will elevate risk levels, undermining a company’s chances to stay afloat.
Many innovators already in business continue to benefit from VC backing while adjusting to business conditions. The trick is achieving a manageable business focus and scope, engaging in a sustainable operation that does not betray the innovator’s vision and the team’s motivation to keep going. Easier said than done.
There are noticeable differences across industries but, generally speaking, new ideas are now subject to higher levels of scrutiny by VC. While IPO plans have been put on hold, established corporations with cash are in the position to make new tactical investments in smaller companies. Some of these deals will lead to potential acquisitions enabled by lower valuations.
Related posts:
- Innovator’s dilemmas: can you be bullish in a bear market? (2)
- Innovator’s dilemmas: can you be bullish on a bear market? (1)
José de Francisco López
Chicago, IL 10 Oct 08
