Silicon Valley, Reality Sets In

Posted by: Heather Green on October 09

Impossible not to miss Om Malik’s great story today about iconic SV investors telling their companies to tighten their belts and get set for a long downturn.

It’s sobering, welcome news. VCs can be cheerleaders to a fault. Giving pragmatic directions like this are part of what startups turn to VCs for. Yet, it’s coming a little late. Because the problem for a lot of these startups gazing at the prospect of a year or more of “making it through” is that they don’t have business models to fall back on.

During the past year, I noticed that its become a lot more common to hear companies say that they’re not focusing yet on their business model.Classic example from the NYTimes yesterday with Tina Brown’s new startup. Companies knew they could run on the cheap, VC money was flowing, and getting big audiences could lead to the one real exit these days: acquisition. In general, sounds oddly like another time we can remember.

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