10 LESSONS I LEARNED FROM
STARTING COMPANIES IN
DOWNTURNS
Francine Hardaway
BIL, February 2009

IT DOESN’T MAKE ANY
DIFFERENCE
No one lends to startups anyway

 Focus and you won’t notice

DOWNTURNS CAN BE GOOD
They force you to be clever

 They teach you to do more with less
 Over funding often kills companies

YOU DON’T NEED TO OWN PEOPLE
Don’t hire

You’re going to hire incorrectly anyway
Partner and outsource

DON’T RENT SPACE
You don’t need it

 Bring the work to the people, not the people to
the work

FORGET FUNDING
You won’t get it anyway, and you will waste a lot

of precious time looking for it
 Downturn in VC
 Frightened angels
 Diminished discretionary spending for the rich

TURN DOWN MONEY
Draconian terms for startups

 Loss of control
 Exit of the founder with boot in his butt

YOU NEED LAWYERS
Ycombinator has outsourced its documents

 Document everything
 Run the docs by a lawyer when you are finished
 Set your company up to be big

GET AN IMMEDIATE CUSTOMER
And make that customer pay

 If you can’t, re-examine whether you actually
have a product anyone wants

QUIT AND CHANGE YOUR MODEL
Seth Godin’s “Dip”

 If you can’t get any traction, there’s a time when
you should stop
 Not after they have foreclosed on your home

ONLY PROTECT YOUR IP IF IT
MATTERS
This is a discussion for an attorney.

 An IP attorney, not your mom’s divorce lawyer