RIP : Risk Taking, Good Logic & Instincts

While the fabled "RIP Good Times" Sequoia presentation made a huge impact, Benchmark and few others followed. Look at John Doer's dull advice to startups. The irony is that these forceful negativity helps create the very downturn that venture capitalists are warning their companies to defend themselves against, perpetuating a sort of vicious cycle downward. Sequoia highlighted Salesforce.com Vs Siebel performance between 2000-2005 in their presentation as a sign of almost tracking financial indicators. Today's SF chronicle has a nice interview with Marc Benioff where he refers to the Sequoia slides and has something very interesting to say - how he approached Sequoia thrice to raise capital and failed all the three times! I agree with Marc and my feelings are with him - when it comes to enterprise software in Marc's own words,

"During the last cycle, we were one of the companies that was very successful. Sequoia and every other venture capital firm turned us down for funding. We raised $65 million to start Salesforce.com almost entirely on our own from individuals, from myself, from Larry Ellison and from others. And those VCs didn't - they never helped us. Those venture capitalists, in many times they A. overreact; and B. get it wrong.When I saw that presentation, I think that you have to separate the wheat from the chaff on that. Which is that yes, we're in difficult times, but in difficult times, some companies will struggle but others will be very successful and you have to decide if you're going to be one of those companies"

As I see it, we need more daring and courageous approach based on a more balanced perspective here. Take contrarian approaches-like what Warren Buffet is demonstrating -"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful". The uncertainty is also an opportunity for some to breakout into a success spiral in the backdrop of negative sentiments. Therein likes the key for the turnaround and make good of this troubled times.

Labels: Emerging Trends, US Economy, Venture Capitalists