It’s interesting to hear different people’s opinions at the World Economic Forum about what the economy is going to do this year. Most people here believe we’re in the midst of a recession, which technically is two quarters of negative growth. There’s certainly many here who are gloomy about the future, but there is definitely lots of positivity too.
I spoke with Steve Forbes last night (yes, that Steve Forbes) and he thinks that the doom and gloomers shouldn’t be listened to. He sees one quarter of bad news and then sees the economy coming back in the second quarter.
I forget his name, but a senior partner at Accel Venture Partners told me while we were waiting for a bus together that he’s watching the sales and other data from 250 startups reporting to Accel and he sees nothing but growth and is very optimistic. That optimism has been shared among the VC’s I’ve run into this week.
Google execs are upbeat and are hiring and so are many other companies. Startups continue getting funded. Facebook’s executives tell me they are continuing to hire and expand at a rapid pace.
On the other hand, the subprime problems are very real. I know a couple of people who are getting kicked out of their homes because they couldn’t afford to keep up with payments. Now, you can blame these people, but one of these families has an autistic child and so the mom can’t work. That wasn’t something they planned on, but they are getting evicted nonetheless and this is in Silicon Valley in Saratoga, a pretty rich community. Certainly real estate values are under pressure, in some communities in San Joaguin Valley in California housing prices are seeing huge drops (I’ve heard stories of homes being sold for $350,000 in neighborhoods where prices were $600,000 two years ago).
So, are we in a recession? Or are things going to roar ahead in 2008? What are you seeing from your vantage point?