I've had the opportunity to be in Asia (Hong Kong and Singapore), Silicon Valley, Boston, New York, and Europe in the last 2 months of this year. Most of the community I've been with has either been technology or science-based entrepreneurs, venture capitalists and other institutional investors banking those start-ups, or professional services providers helping fast-growth companies hit their various milestones. It struck me that I'd had the opportunity to sample how each community, country, culture, or continent was responding.
Asian perspective: "We've had tsunamis, bird flu, SARS, and financial crises like the Asian flu (1997 financial crisis), and this recession that's hitting us now is likely worse than all those combined." U.S. and European entrepreneurs who were offshoring their manufacturing were saying that getting products prototyped in mainland China-- something that used to be a problem because start-up run lengths were too short-- was no problem at all. Vast numbers of factories were laying off workers, and these same factories were more than willing to start with shorter runs and low/no guarantees to help offset the freefall in the manufacturing sector there.
Silicon Valley: Suffice it to say, out at dinner on a Monday night at a restaurant called A16 in the Marina District in San Francisco, there was no sign of recession. We had a 7pm reservation, and almost got waved off for being 15 minutes fashionably late, getting the last table squeezed in amongst the revelers. Consumers were showing no spending fatigue. Out near Sand Hill Road, it was a bit of a different story. A few investors were shorting the stock market with their personal money, but still emphasizing that this was the time to do seed and Series A investments. All in all, as is typical for Northern California, optimism abounded.
Boston: Here, it sounds much more like Asia: pull in all investing. Only add follow-on investment to your own portfolio. If you do invest, the going rate in some VC circles was rumored to be, "new valuation pre-money is equal to the amount of last money in." In other words, if the last round was $15 million, that would be the valuation, no matter how much had preceded it. CEOs in Boston are talking about the return of "vulture capital." In the parking lot of a commuter rail train station, one late-night rider yelled back to another who was also getting off at the same stop, "What you doing getting home so late?" The response-- "Went out with some of the people from work who got laid off today. Cut 15 or 20." The first commuter answered back, "Yeah, layoff at our work today as well, but no one went out. Stayed and worked late."
New York: Quiet. For the city that never sleeps, there was a really good imitation of somnambulism. Everyone seemed to have had a prolonged Ambien moment. The epicenter of the financial crisis seems to have brought down virtually every other sector along with it.
Europe: Or, more specifically, the UK. With the Sterling down, and the second biggest stock market suffering similar downdrafts as that of the U.S., it's also really quiet. Unlike the last recession brought on by the dot-com bubble burst where Europe lagged a full 6 to 12 months behind in its slowdown, the UK in particular has suffered almost simultaneous with the U.S.
Ultimately, this was the take-away for me-- no matter whether I traveled 3 thousand miles west, or 15 thousand miles east, the speed at which this downturn has traveled was faster than any plane I could catch. It had beat me to each continent I landed on, each city I was doing business in.
As we cruise into the New Year, my wish is a hope that the recovery is also as globally instantaneous.
