MAY 2008: AROUND THE STATE
Startups: The beat goes on
PORTLAND The
downturn, big or small, is here. The gloomy economic
pronouncements are being made. And for a lot of tech startups
in Silicon Forest, things couldn’t be better.
As Oregon’s economy begins to slide, the startup
community is coming off of a record year for raising funds:
nearly $226 million. Companies are moving into hip new spaces
in downtown Portland. Other companies from out of state, Vidoop
is one example, are opening offices here.
Rick Turoczy, who runs Silicon Florist, the go-to industry blog
that follows startups, says he sees a healthy flow of talent
moving in and out of the state, and not just to Portland but to
Eugene, Corvallis and Bend, too.
The question is, will it last? The answer, based on the
anecdotes and individual perspectives of some in Silicon
Forest, is yes.
Hideshi Hamaguchi has an almost philosophical take.
Hamaguchi is one of the founders of LUNARR, a 2-year-old
Portland startup that’s created a way for people to edit
files together on the web. Big companies hate uncertainty, he
says, but it’s a core element of a startup —
innovative ideas always bring an element of uncertainty to an
industry.
In a recession, where nothing is certain, big businesses
falter. But since startups are already equipped to handle
uncertainty, Hamaguchi says, they don’t face the same
risks as their bigger counterparts.
Cost cutting at big companies, says Sam Lawrence, chief
marketing officer for Portland’s Jive Software, is
another reason startups survive in economic slumps: Big
businesses see what they’re paying for big programs with
lots of licenses and they being shopping around for something
new. That’s great for Jive — which makes
collaborative software that’s cheaper and easier to use
than what’s offered by Microsoft.
Not all startups will be immune to the downturn. Some VC money
will dry up. In Silicon Valley, employees at some startups are
hedging their bets and moving to more established
companies.
Their fears may be unfounded. Turoczy, who also owns the
Portland startup communications firm Return, argues the
“startups do better in a downturn” idea is flawed.
A good startup will do well during practically any economic
condition, he says.
“That’s the beauty of the startup. It seems risky,
but in actuality, it’s the safer bet,” he says.
“During downturns, startups simply start getting the
attention they truly
deserve.”
ABRAHAM HYATT
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