October 27, 2008
According to investors and entrepreneurs, reports a New York Times article, most web startups are trying to weather the economic crisis by laying off employees, curbing growth, and cutting expenses.
"The same factors that have made it so easy to create Web 2.0-style start-ups — low fixed costs, access to inexpensive overseas programmers and cheap ways to advertise online — also make it relatively easy for even faltering companies to cut back their operations to the bare minimum and hang on through a slump," write Brad Stone and Claire Cain Miller.
Recently, social music site Imeem, search engine Mahalo, visual search engine Searchme, real estate site Zillow, online radio site Pandora and social network Hi5 have all cut about a quarter of their employees.
Comments | 3 Total
October 27, 2008 at 12:38pm by Brendan Collins
I'm gonna go ahead and disagree with this blanket statement. The key for web startups is funding, be it VC or otherwise sourced. If the VC industry is hurting, as many are reporting, then the trickle-down effect is that a great many web startups will be forced to get out there and panhandle with the rest of the chaff. But, if web startups had already secured a good sum of cash before Wall Street exploded then they obviously stand on much more solid ground. In this case, layoffs and curbing growth would help. Without the money, though, I'd say that most new web startups are DOA.
October 27, 2008 at 2:08pm by Scott Thompson
Anyone that didn’t learn from the late 1990s and the fallout that followed is asking for trouble. Start-ups have to cut back to survive, but so does every other company in the modern world. I hate to see companies cut employees and by taking other measures like tighter budgets it may be possible to avoid employee layoffs, but there will be cuts in the budget.
Growth is still possible if the start-up hasn’t already overextended its reach. With strategic thinking and better planning not only can most start-ups survive they can grow as well.
October 28, 2008 at 10:38am by Jacqueline Edwards
business will be able to grow in the economy by educating their valued employees to understand the direction of key grow the company need to saturate itself in to survive and come out stronger than ever when things start to recover! A well executed plan with a knowledgeable staff will translate into massive growth.