The best time to start a company is at the bottom of the market or at the top of the market.
During a recession and capital scarcity, most people of scared shitless and sitting in the fetal position, hoping they don’t get canned. The tourists have gone home or are enrolling in Business School. Risk-averse people stay in full-time jobs, don’t move cities, don’t sell their house, immigration levels drop, which all means less competition. Overextended companies get obliterated and lay off high-quality people, which means those talented, humble people are looking for a new project. It’s a great time to recruit, find office space, and inspire people who are looking for a silver lining.
At the top of the market, when things are booming is another excellent time to start. At the top of the bull run, people get sloppy and overconfident. They attribute their success to their smarts and not the momentum of the market. They aren’t scared anymore. Everyone is cocky and their risk tolerance has ticked up over time. Risk tolerance builds over time, correction happens instantly. The result is a lot of inexperienced, overcompensated people who think they are good but don’t know the first thing about grinding it out when things get tough. Customer service is shoddy because there’s always someone else willing to pay, and innovation slows down because companies that are overextended lose focus and try to do it all. The top of the market is the perfect time to pay attention to customer service, treat your customers like you’ll lose them tomorrow, build loyalty for when things slow down and build up a rainy day cash fund
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