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Paul Graham has a new essay on Why to start a startup in a bad economy. Actually, he doesn't necessarily think starting in bad times is better than good times, just that there's nothing special about good times when it comes to starting high-tech businesses. He says that the state of the economy is a rounding error compared to the effects the founders have.

The economic situation is apparently so grim that some experts fear we may be in for a stretch as bad as the mid seventies.

When Microsoft and Apple were founded.

As those examples suggest, a recession may not be such a bad time to start a startup. I'm not claiming it's a particularly good time either. The truth is more boring: the state of the economy doesn't matter much either way.

If we've learned one thing from funding so many startups, it's that they succeed or fail based on the qualities of the founders. The economy has some effect, certainly, but as a predictor of success it's rounding error compared to the founders.

From Why to Start a Startup in a Bad Economy
Referenced Sat Oct 18 2008 07:02:32 GMT-0600 (MDT)

I enjoyed reading it since I'm in the middle of starting a business now. I would disagree with Paul only in that I think bad times are better for starting businesses in some ways. Here's one: it's easier to find good talent.