In a St. Gallen Symposium interview conducted in early 2010, William Saito, founder of I/O Software Inc was asked a series of questions regarding the potential impact of start-up companies during global economic decline.
Mr. Saito, who is an adviser for start-ups at the National Institutes of Advanced Industrial Science and Technology in Japan suggested that during challenging economic times grants start-ups the opportunity to create an innovative business model that can help influence the direction of the business within the global economy. Barriers to entry for start-ups adhere to more stringent constraints during economic worry, comparatively to industry bubbles because the capital to grow the start-up is allotted to business owners with more caution. Acknowledging his success during the tech bubble of the late 1990s early 2000, Mr. Saito suggests that budget management will assist start-up companies to prevent and prepare for economic headwinds which blocks the business from successfully propelling out of an incubation stage and into an acceptable production for consumer benefit.
Although start-up companies confront the challenges of not meeting expectations from private shareholders, the chance of eliminating the project in its entirety is extremely low, Mr. Saito advised. Staying with the course of budgetary matters makes the start-up company more efficient. Therefore when the economic times does experience growth, the opportunity to use invested money towards the business projected growth slightly loosens the spending caution without excessive worry to met budgetary deadlines.
To summarize Mr. Saito’s comparative analysis between Japanese and United States business start-up processes, says that in Japan business start-up managers do not give themselves room to fail. Failing is not part of the growth process therefore ensuring the business test model will fulfill its promise is very crucial. In America, failure is the “springboard to success” and is encouraged when a company does so. Inferring from his thoughts, I believe he is saying that America’s start-ups give leeway on an unsuccessful startup by providing the opportunity to fold, correct the errors in the business model, and proceed again with a stronger strategy. Utilizing this flexibility to a startups advantage could possibly give reluctant investors a sold reason on why they should invest.
Mt. Saito’s knowledge towards taking opportunity during the economic downtrends provides a vote of confidence for the entrepreneurial spirit. Where there is a crisis lies opportunity. Acknowledging what sector and/or industry could utilize your business model to slow down, if not prevent, consumer costs during an economic spiral is a promising way to have your business grow exponentially.