Roberts celebrates 10 years in venture capital this month. He began as part of Salt Lake City's Wasatch Venture Fund (now Epic Ventures), an affiliate of Draper Fisher Jurvetson, in March of 2001. We thought readers might like to know more about this interesting player in the tech community.

-Bryce Roberts,
Why I Deleted My AngelList AccountSince co-founding the OATV fund in 2005, Roberts has made investments in the popular geo-location site Foursquare (where he's a board member), Parakey (founded by Firefox creator Blake Ross and acquired by Facebook), UK-based Path Intelligence, a site dedicated to tracking shopping patterns and "quantified self" fitness tracker service RunKeeper.  As an undergrad, he studied philosophy at Brigham Young University.

Roberts recently offered some interesting advice to would-be fund raisers who've not yet launched their companies.  "If you're looking for funding for a prelaunch product or service, you'll need a to be a very interesting person [or someone] with deep expertise in your field," Roberts wrote in a guest post on Mashable. "Amplifying that expertise through blogs, Twitter, live streams will get you the attention of VCs, too. If you don't qualify as either, all the right intros in the world won't get you VC funding."

You can follow Roberts on Twitter (where he's most active), his personal blog Bryce.vc, on Facebook or on Quora.

VC Larry Cheng posted his 4th annual Venture Capitalist Blog Index today, listing and ranking 155 blogs written by venture capitalists. I discovered it when a feed we have in our team RSS reader tracking comments posted around the web by VC Fred Wilson delivered the link. I put the list into ITA Software's Needlebase, scraped a list of all the blogs, then put them in a Blekko custom search engine. I searched for the word "love" (as I always do in any new search opportunity) and found that these 155 blogging VCs have used the word love in exactly 15 blog posts so far this year. What do they love? Read on for an amusing survey of 15 things blogging VCs love in 2011.

Chris Dixon says that people love horse races like NYC vs Silcon Valley, Facebook vs Twitter, IPO markets vs private exchanges, the valuation of some startup vs some other startup. But he says that "these questions are all footnotes that will be forgotten in a few years," in his wide-eyed and awesome blog post PREDICTING THE FUTURE OF THE INTERNET IS EASY: ANYTHING IT HASN'T YET DRAMATICALLY TRANSFORMED, IT WILL.

Brad Feld loves working with entrepreneurs and helping create new companies. It's all about doing what you love, he writes in a reflection post titled Snow in Seattle.

Jeff Bussgang says that if you love running your business, that's one of the factors that can make it wise to walk away from large sums of money. He's sat with two portfolio companies that have made that decision recently and wrote about it in a post titled Walking Away From Liquidity.

Charlie O'Donnell is excited about the new API for Q&A site Quora he says he'd love a Quora column in Tweetdeck and a Quora Feedera email digest in his inbox. He's looking for a way to "monitor the important conversations without having to sit in it all day." Hey Charlie, this isn't as cool as a Tweetdeck column, but did you know that Quora provides RSS feeds (ReadWriteWeb asked them to and they did!) including for Answers posted by username? And the URL structure is really simple. (My answers are at http://www.quora.com/Marshall-Kirkpatrick/answers/rss) If you've got a list of people you find compelling, it's not hard to build an OPML file of all the questions they answer. (I put their names in a text file, find and replace to turn those into feed URLs, then use a plain-text-to-OPML web service, save the file locally and import into a reader of your choice.) Primo signal-to-noise there, too. Will an API propel Quora into the mainstream... and will that suck?

Rob Day loves the funny looking dogs that win the Westminster Kennel Dog Show. "Be polarizing," he urges entrepreneurs raising money. "The winner always seems to be some funny-looking dog, often a variety of dog you've never heard of even if the general category is familiar, and probably a dog that some people roll their eyes at and some people love. That's what you want your pitch to be." How to raise venture capital for a cleantech startup in 2011

Brad Feld loves the web design firm Slice of Lime.

Albert Wenger loves being told that his idea for a namespace for people is completely crazy.

Mark Suster loved getting to see the White House. How Twitter Got Me into The White House & Saved My Son's Birthday

Albert Wenger again, in a prior conversation about his namespace for people idea, said he'd "love to hear from folks whether they think these are real problems with the current de facto solution and how services should deal with them (ideally with examples of good or bad implementations)."

Charlie Daniels would love to do an experiment with the students in his college class to test his theory that socioeconomic background is a primary determinate of a person's comfort meeting new people.

Brad Feld loves starting off the year with CES.

Fred Wilson hands his blog over to guest poster Charlie Crystal, who points out that startup founders love to take risks - including stupid ones when it's with their own money. M&A Case Study: ChiliSoft

Jeff Bussgang loves five apps he found in 2010 (Flipboard, Instapaper, Disqus, Foursquare and Tweetdeck) He wonders if they will blow up as businesses in 2011.

Fred Wilson kicked off 2011 with the awesome statement that he loves "doing random stuff on the web which takes me to new places and new ideas." Cheers to that, Fred! Globalization

Image from Hikingartist.com

Meeker analyzes technology trends and gives research-dense, high energy presentations at conferences like O'Reilly and TechWeb's Web 2.0 Summit. Last year she discussed research finding that use of the mobile web will surpass use of desktop browsers, globally, within 5 years. How prominent is Meeker? Sarah Lacy, who has covered the Silicon Valley VC market for years, puts it this way at TechCrunch this morning: "As an analyst, Mary Meeker was as famous in the dot com glory days as [Kleiner's John] Doerr was as a VC, so it's appropriate and seemingly a long time coming that the two would wind up as partners."

Let's hope that not everyone at the firm famous for funding world-changing companies like Google and Amazon sees as their number one goal funding companies like the makers of Farmville. Perhaps it really is just about the economic growth, though, and all those other investments made the world a better place only as an afterthought. On the other hand, the socio-psychological meaning and impact of Zynga will likely be the subject of years of academic study; maybe that will do the world some good.

Meeker's research for Morgan Stanley has long been a favorite for web startups to use in their fund raising presentations. Whether Meeker will continue publishing as prolifically, presenting at conferences or speaking as a seemingly non-partisan analyst on the field remains to be seen. Her position as one of the most powerful women in technology clearly remains unchanged.

Below, highlights from Meeker's last big presentation on the growing importance of Mobile, as selected by ReadWriteWeb's Audrey Waters in coverage this Spring.

But there is one other that's often overlooked: Am I dressed appropriately?

When you pitch a venture capitalist, you aren't so much selling your product as you are selling yourself, your team and you business plan. There are thousands of variables that can influence the way VCs respond to your pitch, and dressing appropriately - while completely unrelated to your product, team or business - will have a subconscious effect on their opinions.

Don't Distract the VCs

The point of dressing appropriately is to not only convey that you have the wherewithal to make the simplest of decisions, but also to keep the VCs focused on what's important - your product and your business. If there is any question in what you've decided to wear to a pitch, this will ultimately distract the VCs, preventing them from being sold on your idea.

New York VC Steve Brotman, co-founder of Greenhill SAVP, gave The Wall Street Journal an example of very distracting clothing worn by an entrepreneur pitching him an Internet startup during the dot-com era. According to his story, a woman dressed in a strange green outfit entered his office unannounced and offered up a business plan. "You lost me at hello," Brotman told her.

The woman was selling a product with "avocado" in the name, and was attempting to dress like an avocado. "I'm not about to do a deal with a lady dressed like an avocado," said Brotman. The lesson here? Don't let your product influence how you dress; VCs don't enjoy gimmicks.

Safe Bet: Business Casual

A general rule of thumb for appropriate dress when speaking with VCs seems to be "business casual." Here's a sample outfit that fits this profile, starting from the ground up: black dress shoes or boots (no sneakers, flip-flops or Crocs), a nice pair or jeans or dress slacks (no rips, darker shades work better, in my opinion), solid color t-shirt or polo (collared shirt with no tie could work also), and a black casual sport coat.

Plus or Minus 20%

While your appearance should not be distracting or influenced by gimmicky product promotion, if done right you can use it to your advantage. Boulder's Andrew Hyde of TechStars suggests entrepreneurs use the "20% rule" when deciding what to wear.

"You want to look 20% better or worse than your actual position," he says. "The key is to either look good enough to make them think you're trendy, or bad enough to make them think you're hungry."

I would recommend going the safe route, but more confident entrepreneurs could use this tactic to their advantage. Hyde, who also co-founded a clothing line of humorous T-shirts for venture capitalists, says whatever you do, "Don't wear a blue shirt, or they will think you are mocking them."

Unsure? Just Ask

But what does a seasoned venture capitalist think after being pitched hundreds, if not thousands of times? Silicon Valley investor Guy Kawasaki says deciding what to wear can vary from company to company, and investor to investor. While his advice is geared toward interviewing at a startup, it still applies to VCs as well.

"A good rule of thumb is to dress one level above the company norm: for example, for a T-shirt-style company, wear a collared polo shirt," he says. "If in doubt, ask what's appropriate for the interview."

This is probably the best advice on the issue. Ask. Try finding other entrepreneurs who have pitched your potential investors first before you ask the actual VCs you are pitching about what to wear - it could convey a lack of experience. Or it could convey an attention to detail and maturity.

What About Women?

Ah yes, women. Seeing as I am a male, I focused this article on the male entrepreneurs out there (who are statistically more common than women, at least in Internet startups). I don't want to leave women out completely, however, so I will offer this bit advice to the female entrepreneurs out there.

It's actually quite similar to the rules of thumb for men - business casual, don't over think it, and don't be distracting. What determines "business casual" and "distracting" are different for women than for men, but I defer to our female readers to provide some helpful examples in the comments below!

Be Smart

The truth is, there is no right answer to the question of what to wear when pitching VCs. Each situation is different, and different VCs care more or less than others about how entrepreneurs look. The best practice is not to over think it, and just rely on what is most likely to work - business casual. No suits, no ties, no problem. Most VCs are pretty laid back, at least in traditional startup cities like San Francisco, New York and Boulder. If you fail to spend your time working out the more important aspects of your pitch, what you wear will be the least of the VCs' worries.

"Solving the climate crisis is more than just a political agenda item - it's an urgent priority that requires innovation, creativity, and ambition," said Blair. "I share a clear vision with Vinod, one of the earliest leaders in cleantech investment, that entrepreneurs in Silicon Valley and beyond will have a tremendous impact on our environmental future."

Based on his continuing work with international climate-control policies, it is likely that Blair will offer Khosla Ventures and its portfolio of green-tech companies both policy advice and connections to government officials who support these efforts. Blair will also likely provide the firm with advice on new investments, though there was no mention whether he will provide any funding himself as an angel.

The partnership was announced before a private audience of portfolio companies and limited parters and other Khosla funders, including Bill Gates. Aside from its green-tech investments, Khosla Ventures has helped fund IT startups like Square, Hunch and Xobni.

This announcement is great news for green-tech companies, which saw a significant dip in venture funding last year. Khosla's partnership with Blair is a large step forward in their dedication to environmental tech investments - a field in which they are clearly determined to become the hands-down leader. Overall, other VC funding figures have been lackluster so far in 2010, but Khosla's clean tech initiatives could help these numbers rebound as the year continues.

Photos courtesy of The World Economic Forum on Flickr.

The first big question that jumps out is: where are the profitable VC funded web ventures?

We heard from lots of gritty entrepreneurs building business the old fashioned way, keeping costs low and funding from revenue. I have done that and know how hard it is to do, so here is a big cheer of recognition for all who are going that route. I hope we can profile some in the future.

When you make it to profitability via bootstrapping, you have a wonderful independence and freedom. You have to keep clients happy every day, but you really do get to call the shots. You don't have a money guy in the boardroom. This is why many people become entrepreneurs.

But what we want to focus on here are VC funded web 2.0 ventures that got to profitability as standalone ventures.

Surely Jigsaw is not the only one?!

We chose Jigsaw to kick off this series because they were VC funded and profitable. (Many people don't like Jigsaw, it seems like a tool for spammers, but that is another story and a bit out of date from what we can see). The point here is, what other Web 2.0 companies have been funded by VC and have reached profitability? Surely there must be some more? Did all the 2003/2004 era Series A funded ventures either exit or fail? Or are some on the cusp of profitability, with enough investor cash to get them there? Even with revenue forecasts that may need to be to brought down as a result of a slowing economy?

Please tell us about any VC funded web 2.0 ventures that are profitable today standalone. Here are the hurdles:

1. "VC Funded". A minimum $3m Series A from a recognized VC fund.
2. "Web 2.0 venture". We will be as loose as possible in this definition. In fact, any web venture funded after 2002 is OK as any venture after that date is likely to have some features of user generated content, social media, SaaS or other 2.0ish characteristics. "Web 2.0" is like the definition of art "I cannot define it, but I know it when I see it and I know what I like".
3. "Profitable". On this criteria we will be tight. We mean the Warren Buffet definition of profitable, which means "free cash flow", otherwise known as "owner earnings". It is really simple and you cannot fake it. You either get more cash from operations (cash from investors does NOT count) than you spend, or you don't. Accounting conventions like EBITDA don't count. More on this later.
4. "Today". That means this quarter. Even better last quarter. Or more than a few quarters.
5. "Standalone". Skype maybe profitable within EBay or YouTube within Google. That is a separate subject. We are looking for standalone ventures that have not exited. They made it to profitability on their own.

Why Free Cash Flow Is The Measure

EBITDA (Earnings Before Interest Taxation Depreciation and Amortization) is an accounting convention that is used a lot in the private equity business. "Private Equity" used to be known as "Leveraged Buyout". The L word is not in vogue today (Ed, using understatement as humor seldom works). Seriously, Private Equity deals have been based on their ability to raise debt at low cost. That game is over for a while.

EBITDA is supposed to be a measure of how much debt you can put on a company. It is usually applicable to well established businesses in traditional industries. Recently it has been used in relation to Facebook and other large web ventures. This is where it gets interesting for web entrepreneurs and their investors.

Is Facebook Profitable?

According to a report in BoomTown in January 2008, based on an interview with Mark Zuckerberg:

"Revenue for Facebook for 2007 will be $150 million, as has been widely reported. But for 2008, Zuckerberg projected revenue to be increased to $300 million to $350 million.

More interesting was the news that Facebook would spend $200 million next year on capital expenditures, which is a whole lot of servers.

By the way, more expenses, noted chatty Mark, those employee levels would rise to more than 1,000 in 2008 from 450 now.

And Zuckerberg also said the company's EBITDA-earnings before interest, taxes, depreciation and amortization and a number widely used by Wall Street as an indication of operating performance-would be $50 million in 2008.

That means the company would have a negative cash flow of about $150 million (EBITDA minus CapEx), rather than break even, as it does now."

Is Facebook profitable today, in the last quarter of 2008? Well it is almost certainly EBITDA positive, butthat is not the true measure. The answer is "maybe". If Facebook is hitting $300m to $350m this year (2008) and their operating costs have doubled from $50m to $100m (which is reasonable assumption as they said they would more than double employees from 450 to 1,000), they would have EBITDA of $200m to $250m. That sounds pretty good. But after $200m in Capex for servers, they are only breaking even on free cash flow at the bottom of their revenue forecast range. And, given the failure of Beacon and declining CPM rates on social networks, my guess (it is only a guess) is that Facebook revenues will be at the lower end of their forecast or even below.

But enough about Faceboom. The more generally interesting business issue highlighted by their story is that Capital Expenditure ("Capex") does matter for web ventures. In fact, it is a mission critical issue, with good software design at the heart of the issue.

Servers Are An Operating Expense For Web 2.0 Ventures

With user generated content, you don't pay people to create content that you use to generate advertising revenues. So your operating costs are R&D (developers), advertising sales and all those senior management overhead lumped into the General & Administrative (G&A) cost bucket. I don't really understand what 1,000 people do at Facebook, but that is another story.

As you scale, people costs should not scale. Servers do need to scale. That is where Facebook must be suffering from some sloppy early software design. That is fine, the initial win is all about user traction and a scalable design is secondary. But today it is a critical issue for Facebook. It is also a critical issue for any venture starting out today. Spending a few bucks early on to get a scalable architecture seems sensible. This is not rocket science, any competent software architect knows how to do this.

Should Servers Be Outsourced Or Leased?

Capex sounds old-fashioned. Why buy servers when you can lease or rent? If Facebook leased rather than bought servers, they could have positive free cash flow even at the lower end of their revenue forecast. The credit crisis will make leasing a bit tougher. Renting via Hardware As A Service (HaaS) is the ideal route for startups you benefit from the scale of the HaaS vendor. But it is unclear how the economics scale for the buyer? It is unclear whether Amazon AWS or any other HaaS is a serious option at Facebook's scale (or the scale of any VC funded venture that is nudging profitability).

Scale Or Profits - The New Choice?

It seems that ventures that can see a fairly quick way to profitability, simply ignore the VC route. The feeling seems to be mutual. VC look at a lot of the businesses that got to profitability and say "too small".

So, you have to choose either big and unprofitable or small and profitable? That does not make sense. If that is true, is this an issue with Web 2.0 models? Some VCs have seen this as a failure of IPO markets, meaning that public market investors won't trust unprofitable ventures promising they will be profitable in future. This "won't get fooled again" view is natural after the Web 1.0 bubble burst.

Trade sales for unprofitable ventures are unlikely to be the solution in the next few years. Not good trade sales at any rate (fire sales are technically trade sales, but they are not a good result). The buyer will be much less willing to fund losses because their investors will be less willing to fund losses for an uncertain period of time. If the venture is close to profitability it does not need to exit and nobody wants to exit in a down market unless they have to. VC have plenty of cash so this is not a financing issue, if the path to profitability is clear.

Maybe profitability for a lot of Web 2.0 ventures is really close? Maybe it just takes longer for Web 2.0 ventures to get to profitable - but that they will be fantastic cash cows when they get there?

Image: mlitty

Dot Coms 2.0? Say it Ain't So...

Maybe we are all just fooling ourselves. When the Internet bubble started to burst in March 2000, most people were saying "that's them crazy Dot Coms, not us". Gradually, it was all of us who were in any way associated with technology.

After 18 months, in the summer of 2002, everybody had capitulated. You could buy shares of Rational Corp (the leading supplier of software tools after Microsoft, bought by IBM) for a valuation of $1 billion when they had $1 billion in the bank and $1 billion in revenues (oh, yes, and a couple of bad quarters which made it obvious that nobody would buy software ever again). You could walk into a VC with a patented machine to turn mud into gold and be greeted with a sceptical "but what if gold falls in value?". You could prove that your $50k software would have $500k savings to a company within 6 months and the response was still "we will get back to you". The technology nuclear winter was very, very cold.

So maybe it is coming again in the technology business. No more funding, no more deals, no more parties. Maybe the hangover is coming.

Innovation Economy Still Thriving

But it does not look that way from what I am seeing. VCs are saying that their companies are doing well (and not all are hyping their portfolio). It also coincides with what I am seeing from companies that I know well. Companies are either growing revenues or getting more funding or doing both. I have interviewed two founders at the Web 2.0 Expo in New York that have broken into profitability. Even if VCs run for the hills they will be fine. These upstarts are taking business from higher cost alternatives.

I have also heard first hand of big deals from large companies awarded to small, young ventures. And I have seen large enterprises that are working on large social media rollouts.

This is not good for big tech companies. But it does look good for small, low cost, agile upstarts. The smart companies have worked out how to reduce risk for clients. What's the risk of implementing Basecamp or Zoho?

I call this the "innovation economy" and that is a tad worrying. It sounds like "New Economy" and we all know where that ended up. I did not want to say the "technology industry" as huge parts of the tech industry now simply follow economic cycles. The fortunes of Microsoft, Oracle, Dell, HP, IBM, Cisco tend to rise and fall in line with global GDP. Bigco is not the heart of the innovation economy.

Shift in Power to Smallcos

It is more likely to do with a fundamental secular shift in power from large business to small business. The Internet and Coase's law would be the theoretical underpinning for that. Something dramatic may have quietly happened, making the playing field not just level for start-ups vs incumbents, but tilted in their favor. It might have something to do with the tools that enable you to run a global business with all virtual operations and almost no infrastructure cost. You can simply scale faster and cheaper than your incumbents.

Conclusion

The market mayhem this week has been unprecedented, far worse than even my worst imaginings and I was thinking it was going to be bad. So this is bad. It will spill over into everything. Many parts of the Web 2.0 industry will be in trouble, specifically those with dependency on consumer advertising or financial services.

But the gritty entrepreneurs are building value and getting profitable and have better opportunities than ever before to get their case heard. VCs who keep their nerve will do enormously well, just as they did from deals done in the 2002/2003 era.

What do you think? Is it tough times for all? Or tough times for the slow and good times for the fast?

Image credit: Thomas Hawk

Zynga is quite similar to SGN, in that both companies mostly focus on games for social networks. Kongregate takes a different approach and makes its games available on its own site only. While this makes playing a game as simple as going to the Kongregate homepage, it also means that Kongregate doesn't have a built-in word-of-mouth marketing network to profit from.

With almost $40 million in money raised, Zynga and its VCs must be looking for a very high valuation for the company. Its main income sources are advertising and selling virtual goods to its players.

It's probably worth speculating that Zynga is going to use quite a lot of this venture money to branch out of the social networks games market and start developing for other platforms (such as cell phones) as well.

Far from it. These are great times for entrepreneurs. Really. This is not our bubble. We had our bubble and it burst in March 2000.

This is a credit bubble, pure and simple. That has far, far bigger implications for the economy than a stock bubble. So the recession is real. It is only a question of how long and how deep and my guess would be on the side of long and deep.

But equity valuations are fine. A very conservative investor friend who manages money on an asset allocation basis - choosing between bonds and equities - is pushing into equities. There are of course pockets of excess - please don’t tell me all the stocks you see that are overvalued, I know thats true - but broad markets are in reasonable value shape.

Nor are VCs going hog wild; sadly, because those days were fun :-) Sure there is a bit too much money at work, but that's good. VCs sure as hell remember the bubble and the burst. It is their “cousins”, the Private Equity (PE) guys, who've just had their bubble - fueled by the credit markets. But while VC and PE may sound the same to an entrepreneur - hey they are all money guys right? - at a more fundamental level they are on opposite sides of what is a very big battle.

The battle is around something which few people like to talk about in start-up circles. It is the big unmentionable, like sex for Victorians. The unmentionable is zero sum game. Yes, in an economy growing at 3% if we are lucky and zero or less if we are not, the dollars you earn come from another business. Economists call it “creative destruction”. People who work at newspapers call it a “disaster”. Entrepreneurs coming in like barbarians at the gate call it “window of opportunity”. Established companies and - this is the point - their PE backers, call it a possible negative externality which might impact Q4 earnings to the extent that they go near their debt covenant ratios. Or in other words, “I missed that barbarian with my boiling oil and he is now over the wall and wreaking havoc and oh my god there are so many of them….”

The first wave of barbarians were bad enough. They at least talked the same language of margins and profits. It is firms such as Craigslist and Plenty of Fish that really worry the bejesus out of people, as they are happy to take massive volume at ridiculous prices; which in a digital world where additional users are virtually zero cost and all the rewards go to the firm that gets the network effect, is totally sensible, rational economic behavior. More rational than chanting phrases learned in MBA classes like a mantra to ward off evil spirits.

But we are in recession, and that does change the game for entrepreneurs. In particular it changes the game for entrepreneurs banking on consumer advertising dollars. Advertising gets cut in a recession. Always has in the past and will do so now. There is a strong belief in start-up circles that the shift from traditional media to online is such a huge shift that it opens up an opportunity that is “big enough to drive a truck through”. Yes we are still in the relatively early days of this massive shift. But recessions lead to irrational behavior as much as bubbles and that can mean some short term pain.

More importantly, recessions have a way of changing behavior that lasts into the recovery and next boom. From that change of behavior, new companies and new industries are born. Pay Per Click, a more cost effective form of advertising, and offshore outsourcing, a way to cut legacy costs, both got their momentum going in the last recession.

Online CPM is like traditional media advertising. It is a traditional media model grafted onto online services. Which is like the talking heads in the early days of TV mimicing Radio. CPM is “faith based advertising”, you cannot measure the return. We will always have CPM but the prices will crash. Facebook ads going for 12.5c per CPM is one straw in this wind. Those low prices are OK when it costs so little to acquire the eyeballs, so these low prices are sustainable and may become the “new normal”.

Think about that. Right now there are new companies and new models that are below the radar screen that will emerge as major powerhouses in a few years and they will be radically different from what's out there today. Thats kinda cool. Kinda scary too.

In a recession, the winners are able to make one of these two propositions:

1. I will get you new revenue for a variable cost that is lower than your current cost of revenue acquisition. Note, that does not mean invest a lot of money now in the belief that new revenue comes in. It means, your current cost of revenue is 30%, I will deliver you that revenue for 25%. Guaranteed, no revenue = no fee to us.
2. I will cut your costs now. Not, in 12 months, maybe, if it all works out. I will cut it now, this month, no investment needed. We are talking hard costs, external vendor costs, not fire a bunch of people to get the return; the latter is also popular in a recession but takes longer and is more painful and may also harm the business, who knows when it is muscles not fat that is being cut. But if you are replacing another vendor it is simple; “they cost you $100,000 per month, we cost $80,000 per month and I can prove that we are at least as good”.

Those are not easy things to deliver on, but if you can deliver on them you will win. If your start-up proposition is marginal, burning cash and the VCs are not calling, well it could get a bit messy. But if you have one of those propositions you can build a phenomenal business in a recession and there plenty of VCs willing to bankroll you to get there - if thats what you need.

Who do you see out there who can deliver what customers want in a recession?