Why now is a great time to start up - The Business Review (Albany):

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But for those who study entrepreneurship — and those who’ve started businessese during arecession — a downturmn provides great opportunities. It requires, however, commonb sense and a great idea that has a chanceof scaling. “Duringb a boom time, when there’s plentyu of money available for everyone, good ideas and projectsa can be competedinto mediocrity,” said Bob an associate professor at Santw Clara University’s Leavey School of Business and a specialistf in entrepreneurial finance.
But in a Hendershott said the positivex in starting a business can outweighthe negatives, in part becaus e the opportunity to move up in a positionj or find a new job is “Spend time getting stuff out therw that a potential user can try,” he “Focus on whether you will have the resourcese to do what you set out to do and provse the concept. It doesn’t make sense to try to sell Sun an idea if ittakes $3 million unless you have accese to those resources.” Tom Gallatimn and his co-founders at started their Milpitas-based network monitoringt company for far less than that in 2002.
The six partners — all technology industry veterans — chippede in about $10,000 each and joined what Gallatinhcalls “the working wives club,” becausse the men relied on theirf spouses’ salaries to survive. To meet their spac needs, they worked out of the cornert of a contract manufacturing business that neededf help paying its utility The venture capital community wanted nothing to dowith “We tried about 35 VCs up and down Sand Hill and we were rejected by all of them because of the choiced of markets we were going after,” said who started his career at Hewlett-Packard Co. in the 1970ss and went on to do stints atInteol Corp.
and Tandem Computers. “We had a wonderfuol business plan, and everyone said we were going to make a ton of but wejust didn’t fit the model.” Gigamon shipped its first productt in 2005. Now, Gigamon’ss data access systems are deployed atthe country’x largest telecom companies, including AT& T Inc. and Sprint Nextel Corp.; cables companies such as Comcast Corp. and Cox Communicationw Inc.; and hundreds of manufacturing, industrial, medical, utility and governmentt networks in more than40 countries. The busineses is profitable, cash-positive and neede new office space. It plan to expand its current head coun t of32 employees.
“We stayed cheap, we didn’r try to do anything fancy, and we leveraged our Rolode resources,” Gallatin said. “In a down economy, peopl e are out there with time on their and we found highly skilled peopls at the end of the layoffr cycle who were ready to come in and take a chancew because theyknew us.” In San President Jeff Kerr launched his business placing ATMs in hotels and airports in but decided to spin it into a franchisre business in 2002. Even aftee the dot-com bust and the terroris attacksof Sept. 11, 2001, the businessd wasn’t hit hard because Kerr ran it lean.
Rents decreasedf as a result ofthe economy, and that helpef Kerr find Class A office space in downtown San Jose. Low interest ratea allowed him to buy and finance while the unemployment rate enabled him to hire a talented marketing ACFN has since sold 128 ATM franchisess inthe U.S. and Canada, and it became one of the fastest-growing companies in the country, listed in Inc. Magazine. “Ths biggest advice I give people is tostay lean,” he “Be financially responsible and watch your use controlled growth and make sure what you do makes sense in the long Ann Winblad, managing director of Hummer Winblad Venture Partners, startede her first company in 1975, when “we had 11 percentt unemployment, people were waiting in line to get gas, the presidentt had resigned and the Vikingsz lost the Super Bowl,” she She launched , an accounting software company, for and she sold it six yearas later for more than $15 Winblad co-founded the venture firm that bears her name in 1989.
She said a downturnm gives entrepreneurs acompetitive advantage, especiallt if they can find investors or get fundinv because “the pond is cleaner. “In any time is the righty time to start a good independent ofthe economy,” Winblad “It does take time to build and march into the but you have to have a valuer proposition.”