Now is the best time to launch a startup

As crazy as it sounds, this is true. Yes, everyone is bracing for the impact of the pandemic. Yes, economies across the globe are heading off a cliff. Yes, venture capital is drying up. Appetite for risk can hardly be lower than now. And this is precisely why now is the best time.

Because a startup is not about raising capital. It is not about closing rounds at ever-higher valuations. And not about racing to grow faster than competition to be the winner in the market that is supposedly huge (or is it?).

Startup is about building a business. And business means generating more money than losing. Someone pays for something you make, or for a service you provide. You keep the difference, or invest it in growth. That’s it really. Funding is just a way to accelerate growth. When a business model is clearly working well, why not take someone’s money, multiply it faster than stock market, and split the profits?

In our little magical tech bubble with rainbows and unicorns we have somehow forgotten that most businesses up until recently were started with founders own capital, or debt. Not because starting a business is only for the rich, but because skin in the game signals true conviction. That is why you need to provide a rigorous business plan to the bank to get a business loan.

So why now? Because in times of crisis, the market is honest and direct. As direct as it gets, in fact. If your business shows some early traction despite all the uncertain conditions and everyone being risk averse, this probably means that it will do extremely well when things get back on track. And if it doesn’t, well, the market won’t tiptoe around. It will say straight to your face: “your business is no good, go do something else”.

Isn’t it better to get feedback quickly instead of hearing “yeah you’re doing great” only to learn the hard way later on that they were just being polite?