10 Reasons Why This Is A Great Time To Invest In Innovation
By Tom Foremski - January 25, 2009
This is a great time to invest in innovation:
- The next big thing always comes out of downturns.
- It is easier to find great people.
- Salaries are lower.
- Office space and other resources are more plentiful and less expensive.
- Capital startup costs are lower.
- IT costs are lower thanks to cloud computing and web services.
- Programming languages and development tools of various kinds are simpler and more powerful.
- Marketing costs are lower (if done right).
- Work can be virtualized across time zones and regions.
- Most importantly: As bad as this recession will get, the upturn that follows will be even larger.
The next upturn will be led by what I call New Rules Enterprises, these are organizations that are highly efficient and have made the most of the economies of Internet 2.0. More on this in future posts.
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Comments (6)
I agree the upturn after the recession will be great. You just have to weather the storm right now.
Posted: January 25, 2009 3:41 PM
Hi Tom,
I'd add an 11th which, as has been documented for decades, during a downturn your competitors are typically cutting or eliminating marketing communications thus your marketing efforts have a far higher chance of making an impact. McGraw-Hill and other's research have repeatedly proven this. However, most tech marketers rarely either maintain pre-downturn marketing budgets or put the pedal down when others ease up.
Posted: January 26, 2009 8:52 AM
Ford: Good point. Recessions also reduce the number of competitors.
Posted: January 26, 2009 4:25 PM
I guess most people somehow believe this as the case, as in cycles. But just being engulfed in the crisis, they find this difficult to think of.
Maybe the first one should be 'If in the middle of the rut, step away and get a perspective!'
Thanks for sharing, Tom.
Best.
Alain
Posted: January 28, 2009 11:48 PM
Alain: Yes, getting perspective is tough. VC funding fell off a cliff in Q4. Why does the VC community react to what is happening today when it is the economy of tomorrow that should be their concern?
If we are in recession today, likely we won't be 2 years from now. So it's better to build during downturns and be ready to reap the benefits of the upturn. That's what Intel does, it builds its fabs during the downturn so they are ready to churn out millions of chips in the upturn. And there is always an upturn...
Posted: January 29, 2009 3:39 PM
another component is the "ass to the fire" factor -- that is, people have a tendency to work on all cylinders when their back is against the wall. I'd like to think that our startup will emerge strong because we're on to a new paradigm in personal marketing. Mass marketing is dead.
Posted: January 30, 2009 8:56 AM