Disruptive Startups: the wave of 2009
Sunday, January 4, 2009 at 11:14PM
I've just finished reading Kevin Kelleher's posting on why 2009 May Smile on Disruptive Startups and I have to agree - recessions dry-up venture funding for innovation but also lowers costs of entry for new start-ups that can disrupt the market.
My one reservation with the post is that Kevin mentions only briefly the main issue with being a new start-up in a recession economy - risk aversion. Organisations are less likely to adopt a risky unknown alternative, no matter how innovative, in a recession economy because the tolerance for picking the wrong product or technology are much smaller with reduced budgets.
We are lucky that Software-as-a-Service has already proven itself, as this offers organisations an opportunity to outsource the expensive and complication of running a sizeable amount of their server infrastructure and support. Software-as-a-Service's value grows in a recession economy, whereas large on-premise projects become a millstone around the neck of IT departments that have had to trim budgets and staff.
My one reservation with the post is that Kevin mentions only briefly the main issue with being a new start-up in a recession economy - risk aversion. Organisations are less likely to adopt a risky unknown alternative, no matter how innovative, in a recession economy because the tolerance for picking the wrong product or technology are much smaller with reduced budgets.
We are lucky that Software-as-a-Service has already proven itself, as this offers organisations an opportunity to outsource the expensive and complication of running a sizeable amount of their server infrastructure and support. Software-as-a-Service's value grows in a recession economy, whereas large on-premise projects become a millstone around the neck of IT departments that have had to trim budgets and staff.
Reader Comments