Sequoia's Michael Moritz on how he picks companies

Re:Sequoia's Michael Moritz on how he picks companies by jpwagner on Sunday June 07, 2009 @02:23AM (#645677)

"Oddly enough in recessionary times, customers are prepared to take more risk with a young company if they believe that that company offers them a tremendous advantage that will help them become more efficient or lower their costs."

I don't think I understand the significance of this statement. You always buy a product that 'offers a tremendous advantage that will help [you] become more efficient or lower [your] costs.'

Is the significance that in a recession a prospective customer is less likely to buy 'the standard'?

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Re:Sequoia's Michael Moritz on how he picks companies by ajju on Sunday June 07, 2009 @04:58AM (#645763)

Yes, Moritz is suggesting that companies (at least some of them) are more willing to take the risk of buying from a stratup, if it offers them a tremendous advantage.., during a recession.

I am wondering if there are entrepreneurs who can corroborate this theory based on their experience.

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Re:Sequoia's Michael Moritz on how he picks companies by jpwagner on Sunday June 07, 2009 @05:35AM (#645785)

You just used nearly the exact terminology from the original quote. Sorry, I do not think the concept is clear.

Since the advantage over 'the standard' changes depending on what product and what startup we're talking about, this seems to be more of a comment on the likelihood of the buyer to stick with 'the standard'. (additionally, the wording (and paraphrasing) are not making this clearer...some companies...more likely...tremendous advantage...etc)

I'm attempting to make "his theory" concrete in wording so that it's comprehensible. I think you can boil "his theory" down to:

Buyers' preference for 'the standard' is inversely proportional to the current economic state.

What do you think?

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Re:Sequoia's Michael Moritz on how he picks companies by ajju on Sunday June 07, 2009 @04:12PM (#646283)

I think his theory is more like:

Buyers' appetite for 'the non standard' is inversely proportional to the current economic state.

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Re:Sequoia's Michael Moritz on how he picks companies by jjs on Sunday June 07, 2009 @05:48AM (#645798)

I think they're emphasizing "become more efficient or lower their costs" as opposed to growing the company, or increasing revenue.

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