I've so far resisted the urge to post polemic statements about the death of startup funding, or the alternative "perfect environment" to build a startup. My opinion doesn't much matter in the grand scheme of things, but I've been reading various blogs with a lot of interest, as they cover how economic down times may affect funding - which of course affects entrepreneurial software development. One of the most respected bloggers I read in the VC/Angel world is Brad Feld. Brad had an awesome, short post recently that featured an article that I feel really gets to the heart of the matter: in turbulent times are both the greatest threats, and the greatest opportunities. The wonderful thing about early stage startups is they already run lean. There is a tremendous amount of sweat equity, smart spending of your dollars, and concentration on getting to cash as quickly as possible already. That means that entrepreneurs are UNIQUELY positioned to achieve in a tough environment. This article by Paul Graham (pointed out by Brad) explains in great detail why - economy or not technology marches on.
If you wait - your idea will still be snatched up by someone else. And that idea will land in a market with less competition. So when the market and the economy DOES uptick - they'll be in a perfect position to capitalize on that growth. Where would you rather be - playing catchup? Or running with the bulls...
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