The $15 Billion dollar question is whether tech (ahem — consumer web applications) are recession proof. One of the nice things about being in an industry that traditionally doesn’t produce revenue and relies heavily on the advertising industry, venture capital and black magic to keep it afloat is that you don’t spend a great deal of time worrying about consumer spending.

You do, however, start to care when all those ad dollars start running dry. Combine that with the fact that the traditional sentinels of technology — companies like eBay, HP and Amazon are starting to lay people off and the fact that we haven’t seen an IPO to speak of in 2 quarters and all of those “turn your assets into gold” infomercials start to look a little less speculative.

Should be get ready for another bubble? I can just see the pundits salivating.

Well, let’s check the scoreboard.

  • Startups are going to die — especially those that rely exclusively on advertising income.

  • It will be harder to get funding — especially if your business model involves 18 million users and Adsense boxes.

  • Old world brick and mortar thinking about “revenue” and “burn rate” are going to come back into vogue.

In short, the industry is going to be forced to mature from its bed wetting phase and you know what?

That’s not really such a bad thing, is it?

Get back in the van Jagger because our rock star status is over and the only thing that will matter in the coming months is whether we have a product that can turn a profit (revenue) with a low cost of operation (burn rate).

If you aren’t there yet, take the time you’re still sitting in the cat bird seat to start getting prepared — if you already are, consider trimming back even more to make sure your war chest can survive a few more hammer blows.

The secret to surviving in a bad economy is to become a real business.

(Forum)

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