The wrong question: Is now the right time to start a company?


Yes. The answer is always yes.

But it’s the wrong question.

I started Smart Bear in a recession (2002) and it went great. I’ve been explaining for eight years why recessions are a great time to start a company. It’s wise because costs are low (every vendor is thrilled to have new business) and if you can get people to buy when money is tight, you’ve really proved you have a desirable product. When the economy rushes back, you ride the wave.

I started WP Engine in a boom (2010) and it went great. When the economy is good and the product fits the market, sales are easy. If you choose a market that’s already large and growing (as we did), there are big opportunities with many niches. Sure, when the economy turns south, if you haven’t built a sustainable company with solid financials, you’re in trouble, but a unsustainable company is always secretly in trouble. It’s great to have at least some of the uncontrollable variables in your favor; starting up is hard enough and unlikely enough as it is.

So it’s always a fine time for a startup, which is why it’s the wrong question.

It’s always a fine time to start a company, but maybe not your company. Instacart might be a good idea in 2017, but Webvan wasn’t a good idea in 2000. Ride-sharing was a great idea when Uber and Lyft started, but would be a terrible idea today (because of brutal, unsustainable competition with entrenched players willing to intentionally lose billions of dollars for years to subsidize their long-term success).

The right question isn’t: “Can a wonderful startup be started now,” the question is “Should this startup be started, right now, by me, solving this problem, for these people.”

The answer can be found by considering the Five-W’s of startup justification.

Whether you’re bootstrapping like I did with Smart Bear or raising tens of millions of dollars as we did at WP Engine, this is the right question.