Editor’s note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at email@example.com.
—A founder in China
The first thing to do is to have a great idea. You should have the same high bar on an idea whether capital is easy or hard to get. The thing that matters most is how you invest your time, energy, and passion. You have to be convinced that you are working on something great. Great founders don’t create a company because capital is easy to get. They create a company to change the world.
In tough times people are reluctant to give money. But that doesn’t mean it’s impossible to start a company, and it doesn’t mean that you shouldn’t pursue your idea. Great founders are not constrained, and great companies will still find sources of funding, as capital will go to the best companies that are out there. (The real truth is that when money is more constrained it lets the VCs separate the signal from the noise.)
I know times are different, and these times are unprecedented, but we have been through difficult fundraising times before, “capital winters” as you say. GE, Cisco, and Southwest Airlines were started in depressions or recessions. And like the proverb my friend Marc Benioff, the founder of Salesforce, who survived the dot-com disaster to build one of the fastest-growing and most innovative companies of all time, quoted in his book, “The storm is the time to fish.”
If you are working on something the world needs and there is a big market for and you have a unique approach, you shouldn’t be afraid. It may be harder to get money, but the best companies will still get funded. Difficult times may scare away some founders, but it will not scare away the great ones.