Why now is a great time to start up - Memphis Business Journal:

xoqylyjibo.wordpress.com
But for those who study entrepreneurship — and thosse who’ve started businesses during arecessioh — a downturn provides grea t opportunities. It requires, however, common sense and a greayt idea that has a chanceof “During a boom when there’s plenty of money availabld for everyone, good ideas and projects can be competed into said Bob Hendershott, an associates professor at Santa Clara University’s Leavey School of Businessa and a specialist in entrepreneurial finance.
But in a downturn, Hendershottt said the positives in starting a business can outweigyhthe negatives, in part because the opportunityh to move up in a position or find a new job is “Spend time getting stuff out there that a potentiap user can try,” he said. “Focus on whether you will have the resourcees to do what you set out to do and provesthe concept. It doesn’t make senswe to try to sell Sun an idea if ittakesx $3 million unless you have accesas to those resources.” Tom Gallatin and his co-foundersz at started their Milpitas-based network monitoringt company for far less than that in 2002.
The six partnerz — all technology industry veterans — chippedx in about $10,000 each and joined what Gallatimncalls “the working wives club,” becausd the men relied on their spouses’ salaries to To meet their space needs, they worked out of the corned of a contract manufacturing business that neede help paying its utility bills. The venture capitall community wanted nothing to dowith them. “We triec about 35 VCs up and down Sand Hill and we were rejectef by all of them becaused of the choice of markets we weregoingh after,” said Gallatin, who started his careed at Hewlett-Packard Co. in the 1970s and went on to do stintds atIntel Corp.
and Tandej Computers. “We had a wonderful businesw plan, and everyone said we were goin to make a ton of but wejust didn’t fit the model.” Gigamon shippes its first product in 2005. Now, Gigamon’s data access systems are deployed atthe country’ws largest telecom companies, including AT&T Inc. and Sprint Nextel cable companies such as Comcast and Cox Communications and hundredsof manufacturing, financial, industrial, utility and government networks in more than 40 The business is profitable, cash-positive and need s new office space. It plans to expand its currengt head count of32 employees.
“We stayed cheap, we didn’ try to do anything fancy, and we leverager our Rolodex resources,” Gallatin said. “In a down economy, people are out ther with time ontheir hands, and we found highl y skilled people at the end of the layoff cycle who were ready to come in and take a chance because they knew us.” In San Jose, President Jeff Kerr launchef his business placing ATMs in hotels and airportzs in 1996, but decided to spin it into a franchisee business in 2002. Even after the dot-comj bust and the terrorisft attacksof Sept.
11, 2001, the business wasn’t hit hard because Kerr ran it Rents decreased as a result of the and that helped Kerr find Clasx A office space in downtown San Low interest rates allowex him to buy and finance while the unemployment rate enabled him to hire a talentedsmarketing department. ACFN has since sold 128 ATM franchisees inthe U.S. and and it became one of the fastest-growing companies in the listedin Inc. Magazine. “Thw biggest advice I give people is to stay he said.
“Be financially responsible and watc hyour commitments, use controlled growth and make sure what you do makesx sense in the long Ann Winblad, managing directod of Hummer Winblad Venture Partners, startedf her first company in 1975, when “we had 11 perceng unemployment, people were waiting in line to get gas, the presidenft had resigned and the Vikings lost the Super Bowl,” she She launched , an accounting softwarw company, for $500, and she sold it six yeares later for more than $15 million. Winblad co-founded the venturd firm that bears her namein 1989.
She said a downturnj gives entrepreneurs acompetitive advantage, especially if they can find investorz or get funding because “the pond is “In reality, any time is the rightf time to start a good independent of the economy,” Winblad “It does take time to buildf and march into the marketplace, but you have to have a valuee proposition.”