In Depth

Starting Up in a Down Economy

Venture capital investments are down and many financial institutions are struggling. But security entrepreneurs Doug Camplejohn, Aaron Turner and Mike Rothman say if the idea is good, the time is right to launch a company.

By Joan Goodchild, Senior Editor

May 26, 2009 —

Doug Camplejohn: The posers are gone

Doug Camplejohn has an expression, a philosophy. It's an attitude that has kept him going through the many ups and downs of business in the Silicon Valley over the last decade.

"When the going gets tough, the posers go home," said Camplejohn, laughing, during a recent phone call from his home in California.

Camplejohn has founded three startups in the course of his career. His first venture, Myplay, was the pioneer for a digital music "locker" on the web, where users store, stream and sync digital media, according to Camplejohn. It was acquired by Bertelsmann. His second startup, Mi5, created a line of secure web gateways to help enterprises defend their web perimeter and was acquired by Symantec. In this third go-round, Camplejohn said the competitive landscape is thinner, as many would-be entrepreneurs, or "posers," have either been eaten up by the process of a start up or are too scared to try in a recession, he said.

"Startups are hard. If you looked at the probability of success, you wouldn't get out of bed in morning."

- Doug Camplejohn, Mi5 Founder and serial entrepreneur

"In the pre-boom cycle, we got folks who flooded the Valley; people coming in and trying to do a get rich quick scheme. The reality is: Startups are hard. If you looked at the probability of success, you wouldn't get out of bed in morning."

Indeed, the risks involved in starting a company are not for the weak of heart, particularly in the current economic climate where dollars are tight, and interest in risk is rare. According a recent MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association, based on Thomson-Reuters data, venture capital investments are down to their lowest level since 1997. In the first quarter of 2009, VCs invested $3 billion, a 61 percent drop from the same period a year ago.

For Camplejohn, VC wasn't a consideration this time because he has bootstrapped his latest company, Fliptop, by himself. The details about Fliptop are still under wraps. All Camplejohn will say is that it will launch this fall and is "a consumer web service that 'searches the future' and delivers what information you're interested in, how and when you want it."

As far as the economy and how it bodes for interest in Fliptop, Camplejohn isn't daunted. In fact, in hard times he believes it is easier to launch a business. For starters, finding talent is easier because there are more people available, and demands for big salaries aren't high, as they are in good times. Other factors, like the cheaper cost of real estate, are another bonus. But, amid any conditions, it all comes down to the product, said Camplejohn.