With the markets in retreat, banks failing or getting eaten up, and global credit tighter than it has been in recent memory, what is an entrepreneur to do?  And what might the future hold for entrepreneurs?

As is true for many of you, most conversations I am having these days center around the economy, and particularly the credit crunch that is prevailing at the moment.  While I must admit a certain nostalgia for the conversations we were all having last week around what “moose dressing” actually was, it’s amazing what a couple of government “bail outs” will have on public discourse.   Just goes to show how quickly the news cycle goes, but also how incredibly powerful current economic events are.  People clearly have a sense that they are living through something momentous, and in many cases feel very, very concerned.

Well, I’m worried too.  But, I am not concerned that the US economy and financial system is facing immanent or long term collapse.  In fact, I think that the Federal Reserve Board and US Treasury are doing a fantastic job.  Really, I do. They are improvising a solution to the crisis that is internally consistent, and is being executed well. You wouldn’t know this from the media, but more on that in a moment.   In order to appreciate what they are doing, you need a bit of background. 

So your startup is getting going and you need to get your marketing going.  But it sure can be expensive.  It'll cost you cash (thus equity), time, and potentially misplaced distraction.  And does it really work? 

Marketing is one of the most important yet least understood management sciences.  Great marketing drives sales, increases brand perception (thus possibly giving you pricing power), and can really make a difference in your competitiveness versus the competition.  But many companies, especially early stage companies, waste a lot of money on misdirected marketing.

If you are an early stage technology entrepreneur I am going to tell you something you already know – there’s not enough early stage risk capital available in our economy.  Since the aftermath of the Internet bubble, the aggregation of capital has largely moved away from early stage, high risk technology businesses.  It went to different places – real estate (remember real estate?), hedge funds, private equity/buy out funds and foreign markets to name the most prominent examples.  And, the capital that has remained available for technology businesses has largely pooled in a concentration of larger venture capital funds, which are generally poorly configured for investment in early stage businesses.