In the last few weeks, I am amazed at how many people are completely unaware, oblivious, or uncaring of what is happening in the markets.
When you drive past malls, the parking lots are full. People are still out shopping! Maybe they aren’t buying? At least they still aspire to buy even if they are not. However it seems that some people still are.
One of my startups, Ideeli, who sells luxury goods at 40-90% off, is showing great growth. I guess women still want their luxury goods even in a recession.
The other day I was catching up with a buddy of mine and I told him some of my companies are shutting down. He was amazed that this was happening.
Some startups I meet with still are in the mode of building for users and making revenue part of their future plans AFTER they raise their next round. I tell them that the investor community has completely stopped funding startups without revenue WHEN THEY SHOW UP at their doorstep. They look at me like I’m an idiot for asking about and pushing them to generate revenue now.
WTF??!?!
Ignorance? Obliviousness? Inertia of irrational exuberance still keeping spirits high? Or perhaps some things just haven’t affected some?
It almost reminds me of when I was a kid growing up during the downturn of the 1970s. My parents dealt with the problems, but they never affected me directly. I never stressed about it, and nobody asked me to stress about it. Food showed up on the table, I went to school, still had clothes and toys. The world was all right.
I think some are like that. They have money. They have support. They still walk down the street to their Starbucks and buy coffee. Everything does seem normal in our little microcosms.
But if you take a look at the world beyond our immediate surroundings, it’s a mess. The larger, global mess trickles down to creating a mess all the way down to affecting us. It’s in all the news, and in our stock prices, our gas prices. For us in the investing biz, it’s in how we think about building startups.
Sometimes I think people just don’t read newspapers, or watch the news. Or maybe their larger view doesn’t have enough experience yet to process all the macro effects and distill them down to micro effects, and finally down to those that directly affect each and every one of us individually.
I think that I was fortunate enough to be an adult through the 1989 downturn, the boom-bust of the internet through 2001, and now this one. It’s a sobering thing to be hammered so many times and to viscerally have experienced their effects on us. I have learned to process broad data and bring them down to the individual level, and I have much more to learn.
I meet with my financial advisor regularly now and pump him for broad economic data, because he sees much more info than I do. We talk about how it affects my investments, but also about the broad economy both domestic and global because I want that data to process, so that I can strategize effectively in all areas of my life, including my startup investing.
When I think about how I get all my information, it’s almost a full time job keeping track of all this information. So maybe I can forgive those who are ignorant/oblivious/irrationally exuberant because it’s a lot of data to process, cutting across a lot of experience areas, and it’s hard to understand if you don’t have context or experience to pull it all together.
I can only hope that people do a more deeper dive in broader economic factors because it does affect us all, and we’ll make better decisions about our lives, money, and work because of it.
And I can stop getting in arguments with people about why building for users isn’t a good strategy now….(more on this in a future blog post).