Auren Hoffman wrote an interesting article a few weeks ago on how recessions can promote innovation. I can relate. When Zingy was created in July 2001, the mere mention that we were doing „telecom” and „direct to consumer” made investors run away in the other direction. In the end, Zingy was definitely helped by the lack of capital available in the market because it meant that we had very few competitors. Aucland, by comparison, had dozens of competitors in every country with many companies raising over $10 million. As the result, we exhausted our resources fighting for market share rather than building a sustainable company.

Read the article at:
http://summation.typepad.com/summation/2008/03/recessions-prom.html