Sunday, February 8

Time to be "Economic"

This quote is borrowed 'third-hand' via the excellent maoxian.com blog:

Given where we are today, there are only three ways to restore a balance between current private debt levels and our reduced, but much more realistic, asset values: we can bite the bullet and drastically write down debt; we can let the very long passage of time wear down debt levels as we save more and restore our consumer balance sheets; or we can inflate the heck out of our debt and reduce its real value.


So what's it going to be?

The economic impact of the end of credit is currently ripping through USA, UK and Europe. Asia, and Vietnam, is just beginning to feel this tidal wave. What can we expect; FDI dries up, exports plummet, currencies devalue and asset values either tumble further or gather dust un-traded.

In the internet space, VC's and funds like IDG and VinaCap JFJ are going to see the underlying value of their investments tumble too and, surely, will expect their intrapreneurs to make the already invested money last longer, rather than go for 2nd/3rd round funding. Fortunately, online revenue models are not yet established in this market, so not many businesses are going to be relying on income to stay afloat. Interesting times ahead.

3 Comments:

Anonymous Alexandr said...

many times good online business have well organized offline business.

As example my hoster have online support, this mean that mans waiting for customers requests/questions/problem in 24/365. This peoples got money every months and hoster pay for UPLink for collocations.

Hoster have many small customers and this mean that one customer fail and stop pay, hoster services will not be affected because it will have another many small customers.

So, if site show advertising:
1. many people will not left this site at on minute and will continue to see adverticing.
2. many companies will not stop pay for advertising.
RESULT: site will work.

It is simple case why/when online have more power.

09 February, 2009 18:05  
Anonymous Chip said...

"Fortunately, online revenue models are not yet established in this market, so not many businesses are going to be relying on income to stay afloat."
I lmao when read it. I like your humour.
I don't know anything about investment stuffs, but as a rumour among internet start-ups, it'd better hurry up to get invested this year or it'd be impossible next year 'cos VCs will run out of money.
Interesting time ahead.

10 February, 2009 18:59  
Blogger Simon Christy said...

Hi Chip,
You're right about getting invested this year...perhaps it is too late. But it wont be the VC's running out of money :) they'll just get more risk averse and careful at placing their remaining funds.

11 February, 2009 03:16  

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