Last Updated Oct 15, 2008 6:42 PM EDT
That's the gist of what Sequoia Capital honchos Michael Moritz, Doug Leone, Eric Upin and Michael Partner told the companies they've funded. Several tech-oriented sites picked up on the message, but the GigaOm post What startups can learn from Sequoia's Doomsday Meeting did the best job I've seen of putting it in context for entrepreneurs. It's another testament to why my former colleague Om Malik is one of the savviest technology journalists going.
I've picked highlights from a number of points made:
- The economy will go almost into Rip Van Winkle mode -- recessionary cycles historically have averaged 17 years. This one was pegged at possibly 15 years by one Sequoia partner.
- It's the credit markets that matter, not the equity markets.
- Get to profitability pronto.
- Tailor your cuts -- cut engineers if your product is ready, but not before. Cut spending wherever else you can. But don't cut PR or marketing unless it clearly isn't working -- you can't afford to seem to disappear.
- Find some way to get and keep a year's worth of cash.
- Throw out models based on the past -- they won't work.