In a lot of ways, the following 12 to 24 months are going to be very interesting times. Everyone wants to join in when there is a party going on. But, now that the party is firmly over, be it fat pay cheques, exits or IPOs, signs of panic are abound. A lot of it is sometimes even beyond what is required.

It was only recently that realization a struck me: 2008 is second major slowdown I've experienced in my career, the first one being the dotcom bubble bursting rather loudly around the year 2000. At that time I was what you could call me a 'n00b' in the industry, fresh out of journalism school, wide-eyed and trying to find my feet.

It was interesting to see everyone freak out, with results like companies throwing away their radio links (anyone remembers Primus?) to banish employees to the slowish lands of ISDN for accessing the internet and paper millionaires giving up their virtual millions. Though, on the brighter side, it also meant we no longer had companies that promised to deliver emails by hand.

In the years that followed, there was Napster, a new browser on the block called Phoenix (OMG, tabbed browsing!), Gnutella, PHP3, Kuro5hin and a long list of things that can fill up many pages. The point I am trying to make is that even as horrible as the bubble was, the world did not come to an end because of the downturn and the real, hardworking innovators and entrepreneurs kept toiling and a lot of them went on to do really well, while the flimsy ones fell away by the wayside.

Yes, you could argue that this time around the troubled waters run much deeper. Yes, there is a credit crunch. Yes, you won't get a double digit percentage pay hike in 2009. Yes, you will be working harder for lesser. Yes, you will be working with fewer people alongside you (or, if you are really unfortunate, you will even find a new place to work).

So what?

Fair-weather Friends & The Arrington Cemetery

Building a company is not something that is dependent on economic fortunes. It is only one of the many factors that determine how you go about doing it. If you think your company can survive only in circumstances that involve plentiful credit and a leg-up from Arrington, I would say that you are not really cut out for going down the entrepreneurial route.

The current mess in companies is not only due to the collapse of the US economy, it is also because of companies not knowing how to manage or deploy resources. There is a ticking time bomb (that has already exploded in a lot of places), in terms of excess capacity.

Potential versus actual is very much the touchstone of the ongoing downturn. Be it company valuations (the $15 billion poke!) or be it revenue projections and staffing, everyone just looked way far ahead. We did actual hiring for today, looking at projections in terms of the years to come. As a result, we had industry experts talking up market numbers, resulting in insane increases in payrolls quarter-on-quarter, while output roughly remained the same.

This was also seen in the advertising-driven growth phenomenon. Where there is excess cash, there will follow excess spends on advertising. In fact, a lot of the bubble in the digital space can solely be attributed to this. Beyond that, there really was not much in terms of revenue growth. Wipe out the advertising and there is scarcely any value to be found in a lot of the products.

This is the reason why the bottom has squarely fallen out of the digital space. Beyond agencies and sales teams propping up the rates, the value added to the chain never increased. Rather interestingly, the advertising-driven growth is reminiscent of how a lot of animals in the wild react to their circumstances, by making themselves seem much larger, effective and lethal than what they are.

Ignorance & Inspiration Are Not Business Models

I have had this theory for a while now. If you block internet access from a lot of the online companies, the innovation that is done by teams and managements will instantly drop to near-zero. Beyond multiple daily visits to Mashable and Techcrunch for the daily innovation/inspiration fix, original reasons for either introducing a product or making a change is often like Bush Jr's record in the USAF - mostly AWOL with takers only to be found in the internal echo chambers.

Our online industry is much affected by the twin ailments of obsessive CutCopyPaste from the western market and rampant echo chamber-ism. The opportunities lost due to this is incredibly awful.

The problem is not limited to established companies. Start ups are also guilty of going very thin on details and research and focussing only on doing something -- much like a horny 17-year-old after his first encounter with internet porn -- just because they want to do something. The degree of naivety and ignorance I have seen at a lot of the start up events often border on the stunning.

Much of the effort that goes into a start up these days look like a scene from Any Given Sunday or Remember The Titans. Beyond howls of "Let us do something!" there is not much of an idea about what the "something" is going to be. Hint: being able to edit a .erb file is not a measure of your prowess in solving a real world problem.

Ideas Are Like Sex, It Is Neither Awesome Nor Original Every Time

All businesses are not built on original ideas - as infamously demonstrated by Bill Gates with Microsoft. All businesses need not be pathbreaking - as demonstrated by Facebook. All businesses need not succeed in the first year - as demonstrated by LoudCloud.

In any economy there are opportunities available in terms of execution, price and innovativeness. If you cannot realign your product and your firm to reflect your market realities, you either have plenty of spare cash to burn or you are a valued resident of Alice's Wonderland.

Or, you just happen to be one of those incredibly lucky individuals who move from one firm to another doing their own version of the scorched earth policy at their previous firm.

So, What Are You - An Ostrich Or A Long Distance Runner?