Starting up during this bubble

Over the past few months I’ve often been heard saying what a wonderful time we’re in to start a company.  The convergence of mobile, cloud services and social media has created a boom of opportunities ripe for the picking.

But after being here in the Bay area for just over a month, I’m starting to think this is actually a pretty terrible time to start a company.  Mostly cause I’m convinced we’re in a bubble …

1.  Tech talent is incredibly hard to find right now.

It’s well documented how hard it is to find technologists right now.  Google, Facebook, Apple, Zynga, and others are resorting to pretty extreme measures recruiting talent.  It’s hard to compete with those guys when you’re a startup.  New York times had a good article about the competition for talent.  I’ve gone to about a dozen networking events, and talked to enough startups to see this first hand.  EVERYONE is pulling out all the stops to try to find technical help.  EVERYONE!

2.  Tech talent is incredibly expensive right now

I’ve spoken to several developers and recruiters over the last month.  iPhone developer contractors are making $200 / hour, sometimes $250.  That’s ridiculous.  Permanent full time developers are making upwards of $180/year.  That’s insane.  As a startup, you’ve gotta promise a lot of upside to overcome those numbers.  Chatting with Otavio Good last weekend at Super Happy dev house about recruitment challenges really highlighted this for me.  His company Wordlense is a super hot startup right now, and IMO, the sky’s the limit with their potential.  Yet recruitment is posing it’s own challenges for them now (albeit they are looking for elite A++ level talent).

3.  Now’s a perfect time to SAVE!

You really can make a killing right now in the market.  Why not save up some cash, wait for the market to hit the tank (and developer salaries to plummet) … and THEN use your savings to fund your startup.  Use this time to hone your skills and build your network.

4.  It’s hard to be heard through the noise

Simply put, competition is steep right now.  It’s more difficult to be heard by your market.

The biggest challenge with starting up during a bubble like this is finding technical talent that isn’t going to break the bank.  The biggest challenge during a downtime is finding funding.  I’ll take my chances on the latter thanks ….

One thought on “Starting up during this bubble

  1. Hear, hear! I think you’re right on the money with this commentary… And ya, I should know, I’m a recruiter. BTW, I’d like to recruit you?! I know a company that’s paying crazy salaries for mobile dev people (two slots). Hit me.

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