navigating through these weird times

securitization of sub prime mortgages, tertiary credit markets, meltdowns, bailouts, corporations colluding with bond rating agencies – what the f*ck is really going on? does any of this actually make sense to anyone, and why is the united states seemingly at the center of it all? and why should i as an indian entrepreneur actually give a sh*t? let us try to really dumb down what’s going on here, and see if our brains forge ahead. first things first: let’s all understand full well that the united states is a credit-based economy (as opposed to a cash-based economy). people buy everything using the diabolical plastic rectangle. so, now that we’ve set up the story, here’s the rundown: interest rates were deliciously low, making it cheaper for people to borrow money, even those that shouldn’t have been borrowing money. banks sensed an opportunity to ensnare the arithmetically challenged and extended loans to anyone, in exchange for stiffer, more predatory terms. these loans had a honeymoon period, which, when over, would completely screw the borrower. these subprime loans were then bundled neatly into securities, or rather a portfolio of shi*ty loans, and then sold to secondary and tertiary markets. for some reason, someone thought that lumping all these sh*t loans together would actually make them more valuable. smart. then, the perfect storm. the housing market in the us starts to spiral downwards, while honeymoon loan terms come to a close. mr. borrower can’t make his payment, so the bank takes over a house worth half of what it was 6 months ago. simultaneously, since so many large banks had taken large positions in these securitized subprime mortgages, all of a sudden, there is no return on their capital. and banks are in the business of moving capital. oh oh, sh*t hits the fan, all hell breaks loose, and the gov’t is reduced to socializing the losses of these rich, fat bastard ceos who were irresponsibly hording crappy loan portfolios in hopes of achieving much higher returns. phew. don’t skewer my balls for oversimplification. there are many nuances not discussed here, such as the theory that aggressive short-selling by large hedge funds may have been a suspect correlative to the current sky-is-falling atmosphere around the world. my intentions were not to educate you on the ‘economic crisis’, rather, it was to introspect and determine whether any courses of action could help younger, cash-strapped entrepreneurs in india.

here are the phenomena i am witnessing in our business:

• sh*tload of lehman bros resumes on my desk
• advertising revenues starting to dry up
• valuations going south
• vcs taking their finger off the trigger (wondering when it was ever on the trigger)

so what can we do to navigate through these crazy times, even if some of the fear is purely a function of media hype and paranoia? the fear is real, and it is driving business decisions, so combating it is a must.

some suggestions:

hire cautiously – now might be the time to find some great talent on the cheap. people would trade job security these days for a more modest salary, so take advantage of it. only freeze hiring if it drastically increases your cash burn/ability to break even/make a profit/[fill in the blank with business goal].
low-cost/no-cost marketing – talk to the press, engage in other pr activities, leverage communities on existing platforms such as facebook and orkut, and find other cheap or free ways to spread the word.
become revenue-obsessive – we at burrp.com have been primarily focused on enhancing and building new products, with the intention of generating more and more traction across all types of mediums. times have changed in the past 6 months, so we have redirected a lot energy towards significant revenue-generating opportunities. yes, this will put your product roadmaps on hold and may also require you to build additional functionality/products advertisers require. but remember, cash is king.
stay active – because times are tough is no reason to clam up in a shell. keep building, keep your products fresh, and don’t give the outside world the impression that the downturn is affecting you. you’ve got a customer/user base with expectations. those won’t change, so honor them.

the sky may be falling, but stay focused and keep moving along. you’ve come a long way, and a lot of your peers have already fallen by the wayside. if you can get through this, you just might find yourself alone on the mountain, and that’s a good place to be.