The Upside of Downturns
It’s easy to romanticize the golden days of startup building—capital was cheap, growth was king, and the bar to raise money felt surprisingly low. But those days are gone (for my time as a founder, they were never here). And for most founders, that’s a terrifying realization.
But what if it’s not a curse? What if this brutal market is your best shot at building something enduring?
Pete Flint, co-founder of Trulia and now a General Partner at NFX, knows this terrain well. In our recent episode of Breaking Precedent, he shared a moment that could have ended Trulia before it began: launching the company right as the housing market peaked in 2005.
“At the time, it looked like we’d made a colossal mistake,” Pete recalled. But the housing crash didn’t kill the company. It clarified the mission. What had been a “nice-to-have” tool for homebuyers suddenly became essential. Realtors were desperate for new ways to market their listings, and Trulia became a lifeline.
That moment of economic contraction, of fear and scarcity, became Trulia’s tailwind.
It wasn’t the first time Pete had weathered a crisis. Years earlier, he was at lastminute.com, a travel company, during 9/11—arguably one of the worst possible times to be in travel. Planes were grounded. Consumers were paralyzed. But the company survived. And it survived by getting lean, listening to customers, and rethinking what mattered most. That muscle memory—built in crisis—would serve him for the rest of his career.
I’ve felt this personally too. I started TaskRabbit in the middle of the Great Recession. It felt risky to leave a stable job at IBM to start a scrappy tech company built on a radically different idea of work. But that downturn was the perfect time to build a marketplace where people could earn money on their own terms, outside the traditional 9 to 5. TaskRabbit wasn’t just well-timed—it was needed.
Fast forward to today. We’re in another market pullback. IPO windows are closed. Late-stage capital has dried up. Early-stage deals are under greater scrutiny. Founders are facing down runway cliffs and funding hesitations. The vibe shift is real.
But Pete argues—and I agree—this is the perfect moment for clarity. “When capital is flowing freely, startups often scale prematurely or in the wrong direction,” he said. “But during lean times, every dollar counts. You’re forced to focus.”
That discipline can be a gift. Now is the time to revisit assumptions. Do you really need that new product line? Is your customer acquisition strategy efficient? Could a smaller, tighter team actually move faster?
In the same way Trulia, lastminute.com, and TaskRabbit emerged stronger from downturns, this market can be your moment of focus. It’s not about having more money—it’s about making smarter moves with less. And if you can make it through this? You’ll be ready for whatever the next market throws your way.
So, yes—things are hard right now. But they’re also clear. And clarity is the best co-founder you could ask for.
🎙️ Want to hear more from Pete Flint on riding out market chaos and staying founder-focused? Listen to the full Breaking Precedent episode here.
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