Startup lessons from the global debt crisis – Term Sheet

The news out of Europe just goes from bad to worse. What does all of this mean for entrepreneurs?  I have three pieces of advice:

1. Plan for Anything. The range of possible macroeconomic scenarios has exploded in the last few months. We are entering a time of such uncertainty that one needs to be prepared for a far broader range of scenarios than ever before.

2. You Can’t Fund a Big Debt Forever.

“Technical Debt” – the notion that they paying the price for putting off building a robust platform in order to meet short-term customer needs.

I love the movie, Pay it Forward. It beautifully depicts the benefit of being nice to someone for no personal gain and then encouraging them to “pay it forward” to another party. If that kindness becomes too one-way between two parties, “Relationship Debt” can form.

My wife and I talk to our kids a lot about “Behavior Debt” – the notion that you have to deposit some kindness and good behavior “in the bank” if you want to get something in return from someone down the road

If you miss a number over and over again or a deadline, you build up “Commitment Debt.”

3. Paying Off Debts Is Painful and Demands Sacrifice. It’s never easy to step back and pay off your debts, but it is often the right course. Unfortunately, when you’re an entrepreneur, you don’t always find yourself in a position of strength when it comes to paying off debts. Going into “technical debt” is often required to survive and drive cash flow. Commitment debt can be out of your hands if you’re never able to secure the necessary resources required to deliver on your commitments. You get the picture.

via Startup lessons from the global debt crisis – Term Sheet.

The key of keys is high awareness and consciousness and do it over time. This is what my theory is essentially saying: consciously accumulate strengths frequently is the best way of warding off danger and damages. He just puts everything in terms of debts. 

This entry was posted in Human Economics, Teaching cases. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s