Tuesday, September 16, 2008
It would seem that we experienced yesterday differently than our silicon valley brethren. I was surprised to see a Valleywag post that the discussion of the day was self absorbed as usual - about user interface and how tech can make money, not about the impact of the meltdown on the lives of people on both coasts.
And Kara Swisher at Boomtown who said "Last week, one of the things that struck me about the coverage of the two main tech conferences devoted to start-ups, DEMOfall and TechCrunch50, was the almost complete lack of discussion–or, more appropriately, worry–about the troubled economy."
I agree with the path she takes in the post - that the woes of Wall St will indeed affect the Web 2.0 economy, with no path to liquidity in the public markets and the economy slowing there is no question the "ad driven" business models will slow - yet again tech entrepreneurs need to be patient and stay the course. Either weather through with the cash they have, find an acquirer, or (the more fun path) find a VC who will invest for the long term gain and wait the markets out with the company.
But there will be direct impact on tech companies who were selling product to traditional Wall St - specifically to the big banks and broker dealers like Lehman and Merrill, and Goldman and Morgan Stanley. There indeed we'll see a dramatic slowing of spend as the market shakes out and we may see this fallout affect large IT suppliers like Oracle and Salesforce.
At FirstRain we made a strategy decision not to sell to the "sellside" - not to sell to sell side analysts and investment bankers and instead to focus on the buyside portfolio managers and analysts so our exposure today is distraction not a loss of customers.
The personal loss this week will be painful for many thousands of people, and so very sad and unnecessary. Much has been written about the causes leading up to this week's events and I'm not going to add to the chatter. I'm going to be there for my friends who are affected and stay focused on our business. And today we're talking to our buyside clients and they are in the market making money as they do every day - there's a job to be done.