To summarize, their advice can be summed up as:

“Times will be rough, you need to cut costs and hunker down for the storm.  If you can survive the tough times, you will be fine, maybe.  But if you cannot, tough.”

Here is my two cents: while the economic reality affects everything around you, I am not sure there is a need to panic or do anything differently if you had an actual business with clients, revenues, etc.  In fact, I’ve even outlined that you can build a lead now when competitors get trigger shy.

The problem is: for years we’ve seen a reckless record of investing in companies that were anything but.

If as an investor you have been putting up signs for nearly 5 years looking for Facebook apps and Web 2.0 garbage, it’s sort of hard to stop that momentum and look for companies that are making money, let alone profitable.

When you raise money, you do so not just for the dough, but to tap into leadership and guidance.  So while these respected inevstors’ warning bells are prescient and accurate, it would have been nice for them to show wisdom in their investments (I realize this sounds crazy considering the barrage of home runs they have between them…) during boom times, too.

Related:

- Single most important variable to look for when you join a startup.

- Don’t Believe the Hype: Success Easier to Attain Now.

- Surviving in a Downturn.