Startup Companies & The F*** economy

I just felt like writing this because I just had my team in a 1 hr meeting regarding recruiting, headhunting, building relationships and the future.

Clearly the US is fucked right now. Stocks are all over the place (I personally lost a SHIT load of money), consumers are selling everything and anything they can sell (Boats, Cars, Motorcycles, Houses, Vacation Houses, Phones, Office Supplies, etc..) Again great for those with booming businesses.

But, this is bad for many. One of my companies, NeoHire.com is a service provider type company, we provide internet startups with talent to help their companies endure accelerated growth.

NeoHire.com has done a remarkable job over the last year helping startups scale successfully.

Now, we are at a change.

Here is what's going to happen. Now, I was right on Ampd Mobile, I was right about Helio, and I was right on a few acquisitions price point #'s.

Here is what the deal is. Those companies who have raised 0-2.5m are the ones that will be moving and shaking. For those startups who are NOT profitable and depending on surviving off VC funding have a very very slim rate of surviving. They will be trimming staff, while trying to maintain traffic to site and maintain morale in the company. This issue is, by laying off people. maintaining traffic (SEO / SEM / VIRAL / PRESS) and trying to keep employees happy they are going to burn through their funding sooner that later, causing the less connected (BD) companies to flop. The larger shops that have raise 3m+ will have a very strong chance of surviving this depression.

Startups are cutting back on service providers, cutting talent internally to save funds, and executing "Smarter" and not faster.

If you have Money in the bank, now is the time to be prospecting smaller relevant shops and picking them up and a 2-4x multiplier.

The talent pool in California has become very attractive. At one time many people were making big big $'s and bonuses, now this is not the case. People are realizing not to be as stubborn.

You will see candidates coming from the internet industry and banking background who are ready and willing to take jobs at a discounted salary. This wont apply as much to the engineers, however to the non tech it does.

Here is what I advise to many looking for jobs and for startups...

Now is the time people (Companies) want to partner up, working on BD relationships and see how companies can leverage other companies resources to continue to operate and grow. Do those BD deals, do those traffic Distributions, and make things happen. For candidates, many are now wanting to only join More Established Companies, ones that are Large, Profitable, Money if Bank, Etc.. Maybe startups will find it difficult to lure hot talent, especially if it's being led by an entrepreneur with ZERO wins under their belt.

Be Smart, Be Efficient, do your research. Do your background references an follow your gut.

The strong will survive. Make sure to let the industry know you are here, you are keeping your head afloat.

Thanks





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Josh Stomel
Joshua Stomel