There is no dearth of posts proclaiming the death of start ups and the innovation space in light of the crisis that is gripping the financial markets and the global economy. If you ignore the doomsday pundits and keep your head, you will see that things are not that bad. Of course, the days of excess may be over for a while now, but the days of opportunities are far from over.

I have said this before too, but the difference in operating modes between a boom and a recession is that during the times of prosperity the market enables you to leverage scale and make plays based on that. During the lean times this shifts over to working the margins and trying to eke out every single penny from the margins you can make to stay afloat.

So, what exactly are the opportunities?

Pricing Disruption: Almost every existing player have to change their pricing structures to take into account lower spending by their clients. Considering that the boom time is still not a distant memory, pricing for products and services are still on the higher side. The same existing players also have to factor in employee retention and infrastructure issues that a new player would not have to bother with. They are much likely to be stuck with infrastructural and capacity that was designed for the boom times. Thus, it would be easier for a new player to come into the market with lower pricing for any product that will resonate with those clients who are looking to shave off costs.

Technological Disruption: Existing products often use technology that is older and more expensive to run. And this is a fact that holds true across all product domains -- from microprocessors to web hosting -- thus enabling major cost and throughput efficiencies to be factored into cost at which services can be provided. A classic example of this is the Virtual Private Server business. It used to be considerably expensive a couple of years ago to get a virtual server. Now you can get a baseline server, like the one this blog is running on, for as little as $20 a month. Likewise, services like S3 and EC2 from Amazon allow you to leverage on-demand processing and redundancy at a scale and quality which is impossible to think about even at this stage.

Opportunistic Niche Plays: Every economic flameout brings with it casualties of war. There will be employees who have been laid off looking for any deal that is available to them. If you can bridge them with employers who are looking to keep a limit on costs over a platform that takes care of discovery, reputation and billing there is an instant promise of something good coming out of even a situation that is bad like the slowdown. These, though, are much likely to be very dependent on the duration of slowdown, but it is also a bona fide opportunity.