How a Recession Can HELP Bootstrapped Entrepreneurs

8 Sept 2022 · 1 min

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1:00

In this concise solo talk, Dharmesh Shah explains why an economic downturn can be a strategic advantage for self‑funded founders. He outlines five concrete ways a recession creates a friendlier environment: (1) massive layoffs at large tech firms flood the market with high‑quality talent, making hiring easier; (2) existing team members are more likely to stay because recruiters are less active; (3) fewer mega‑funded competitors mean lower competition for paid search advertising, reducing Google AdWords costs; (4) office‑space rents in hot markets stabilize or decline, lowering overhead; and (5) the overall market noise subsides, allowing founders to focus on execution and product building. The overall message is that a recession is not a crisis for bootstrapped entrepreneurs but a period of opportunity for disciplined growth.

Chapters

There are several ways the economic downturn can actually help you as a self-funded entrepreneur. Number 1, because there are hiring freezes and layoffs across many of the biggest companies in tech, you'll see a lot more talent available on the market. 2, the team you have now is more likely to stick with you. They're less likely to be getting weekly calls from tech recruiters. Number 3, remember how you used to get a bit of a mini ulcer every time you heard competitors raising a mega round of capital? That's gonna be a lot less common in a downturn. As a result of which, all those mega-funded startups aren't going to be driving up the cost of Google AdWords. And so there's a chance that you'll be paying less to promote your startup. Number 4, the price of office space is not going to spike up in some of the hottest markets. And finally, and most importantly, a downturn helps those that are just keeping their heads down and executing. This is a great time to just keep building your business without all the extra noise that often comes when we're partying like it's 1999.