At London Webfest, Startups Still in Denial

A deluge of European startups descended on London’s ExCel Centre for the Future of Web Apps 2008 conference this week, and while the economic crisis has already reached Europe, the fear clearly hasn’t reached its startup community.

Mark Rochefort of London-based digital marketing agency Playlab suggested to me that ad-driven business models could meet with more success during the credit crunch, as online metrics give advertisers instant feedback on their campaigns, something that isn’t possible with print publications. A strong selling point indeed, but if consumers rein in their spending to the degree that many expect, one that may prove ultimately redundant. Rochefort, however, was not the only one there who felt his or her startup was recession-proof. The CEO of Swiss business directory, Dorian Selz, said that while its users may feel they should spend less, they will continue to make use of the site to search for local services, regardless of the state of the economy. “People are still going to need to find a hairdresser to cut their hair, even during a global recession,” he said.

The guys from Dutch dev-team Mindtrio, which earlier this year launched, a site that lets primary and secondary schools teachers upload daily homework plans, admitted that they haven’t planned ahead for the financial crisis and currently don’t see a need for outside investment. And Gonçalo Melo, founder of Silver Squid, a startup focused on secure communication tools for kids, conceded, “We know it’ll have an impact but we just don’t know how to plan ahead.”

In fact, of all the startups I spoke to, just one talked about weathering the downturn with a financial cushion: Campbell Scott, founder of IGOpeople, a social network currently in closed beta that brings together individuals, commercial organizations and government bodies. He was confident the burgeoning Irish startup would be safe throughout the financial crisis because it’s secured funding for both its launch and beyond.

In his opening presentation, Edwin Aoki, a technology fellow at AOL, re-dubbed the global financial crisis the GFC so that it “sounds more techie.” Aoki’s suggestion was telling, as the startup industry that he was addressing — most of them developers and designers — apparently need someone speaking their own language to highlight the urgent issues at hand.