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Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Is the tech recession over?

OK, it’s just one data point. All I know is sales of FogBugz and Copilot. But what I’m seeing is this: October-December 2008 were terrible—sales were 20% lower than usual—but starting January 5th, we saw a significant bounce back to the same level of sales as we had before this recession started, and it’s continued to this day.

This could be a fluke; it might not reflect any reality. Or it could be a sign that tech firms, for the moment, are doing reasonably well. The Joel on Software job board is holding steady at about 50 jobs listed, down from a peak around 100, but there are still a significant number of openings for great developers.

Does this jive with your experience?
Joel Spolsky Send private email
Wednesday, February 11, 2009
My sales were near zero for December, but they seem to be rebounding.
Mark Bessey Send private email
Wednesday, February 11, 2009
Our experience has been very similar. Things started to slow down in October, January was almost back to normal and this month has been really good so far. It could of course be related to some additional marketing we have been doing, but companies are still investing in development tools.

Dennis Gurock
Dennis Gurock Send private email
Wednesday, February 11, 2009
Our sales took a big dive in Q408. They have recovered, but are at about 80% of the same time frame in  08.
Meks Send private email
Wednesday, February 11, 2009
Beginning of January was also slow for us, but now things are started picking up. I was just talking to one of my partners today noticing the increase in inquiries.

We'll have to wait a couple of months though to see how sustainable this is going to be.
Dror Send private email
Wednesday, February 11, 2009
I would guess it's due to corporate budgeting process.  New year, new budget.
Yarone Goren Send private email
Wednesday, February 11, 2009
We had a terrible 2007, just terrible.  2008 was huge, getting better every month.  The first 6 weeks of 2009 have been more or less like 2008 and the pipeline is looking just as strong.

Maybe my little company had its recession a year ahead of everyone else?  Or perhaps we're about to run face-first into it?

Either way, it's been smooth sailing for the last 18 months.  But we mainly do custom dev; we don't sell a product.  So my data points may not mean much if you're running an ISV.
Christopher Hawkins Send private email
Wednesday, February 11, 2009
Joel, same results here as well. I saw best sales ever in August and Sept last year, then a slow downward spiral into December which was very bad. Then in Jan., the biggest sales to date and still seeing even more sales coming. I think I doubled what I made last fall, and alreday made half of what I earned last year in one month!  I increased some online marketing for the first time in awhile, so I figured it was related to that. But something else is going on, that seems to be good for software right now. Seems like it is affecting you as well.

My gut feeling with anything tech related right now - and especially certain types of web-related software and services - is that it is improving quickly and going to continue up from here, especially as we cycle through the global recession in the next year or so. After we climb out of the recession, there will be a lot more independent and small business ownership as well, as more people go it alone due to unemployment pressure and other factors. That will cause a surge in online sales and services, especially around affordable, less vertical software and services online. It wont be an open source boom either. I think it will all about small software and services thats tailored to a smaller business community. Let IBM handle McDonalds....you and eye will service Aunt Mabel's Online Pie Factory and 50 other small businesses like her.

Compound this growth with less techies graduating and less "talent" and experienced techies to service the huge surge in tech-related jobs and we will probably see something in the US close to what we say before the Dot Bomb era. The only thing that will temper it somewhat will be offshoring and outsourcing costs....but there are pressures the other way as well (ie will see techies and countries buying, hiring, and using more Western services than ever!) So, if anyone is in tech get ready for more sales, more jobs and more demand. That's Stormy's predictions. I already see it in more sales...and more jobs on job boards where Im at.
Stormy Send private email
Wednesday, February 11, 2009
Wow, same results here as well.  Sales took a dive in Oct through mid January, and have since picked up to as good as ever.  Maybe during the initial collapse, everyone was worried that the world was going to hell, and cut back spending, but now a lot of people are realizing it is not as bad as the newspapers tell us.
john campbell Send private email
Wednesday, February 11, 2009
October was my best month ever (by a long shot) with November and December being slower like normal.  January was very good, and February is looking even better.

I suspect (tech) uISV's do better in times like these because we often compete with very large (expensive) companies and products.  With our low overhead, and often pricing lower than we should, we look quite attractive compared to larger enterprise offerings.  At least that's my theory...
Doug Send private email
Wednesday, February 11, 2009
Yea, I agree.  Its definately a price-related deal. I'm wondering as the economy improves if that means the vertival market will come back and small ISV's are out in the cold?
Stormy Send private email
Wednesday, February 11, 2009
The last 4 months have been good, so far no change in sales at all.  I suspect that it could be related to people investing in systems and software to try and get more performance from their company.  Kind of along the lines of 'how do we increase sales / cut costs?'.  'Well, we should update our website', or, 'lets replace expensive old system x with new cheaper system y'.

Or it could be that the big companies are the ones struggling and the little ones just keep plodding along.  It's just that the media doesn't talk about the little companies.  The media, after all, does have a vested interest in whipping the 'financial crisis' horse until she can plod along no more.  When that happens I suspect they'll go back to the stables and find a 'war horse' or an 'environment disaster horse' to start flogging.
Bruce Chapman Send private email
Wednesday, February 11, 2009
>> I would guess it's due to corporate budgeting process.  New year, new budget.

At my day job this is exactly what happened. The CFO told everyone that nothing but the most important POs (Purchase Orders) would go through late last year. We were trying to limit the amount we were over budget for the year so we purchased very little towards the end of the year.

So with the new year we have started processing all those POs that were put on hold.
Ruben Gamez Send private email
Wednesday, February 11, 2009
Sounds about right... The tech economy starts figuring itself out just in time for the government to throw $50 billion of short-term demand into the equation.
Mark Meadows Send private email
Wednesday, February 11, 2009
I would argue that the reason you noticed a decline in sales at that point was because of all the doom and gloom that were being broadcast.

I have a sneaking suspicion that any deepening of the recession was caused by a self-fulfilling prophecy.

My view is to have enough cash on hand and just keep working. What else can you do?

Good news from Joel :-)
Worklog Assistant Send private email
Wednesday, February 11, 2009
We saw an increase in sales in January versus October-December, but nothing particularly out of the ordinary:  October-December is typically the worst period for sales, recession or not.  I attribute the pickup being to new budgets.  On the whole, 2008 was markedly bad versus 2007.  I wouldn't draw any conclusions about the tech recession being "over" until the data's in for 2009 as a whole.
Michael Kirkham Send private email
Wednesday, February 11, 2009
I do not think its fully over yet - Our sales are still down. But we're taking this recession very positively - It forced us to improve our vision and future strategies. So overall, while the effect will still be called bad from financial point of view, but I'm happy with the outcome it gave us.
Abhimanyu Grover Send private email
Thursday, February 12, 2009
On average my sales are about the same as last year, but the sales plot for the last 6 months looks like a sine wave.  Sept - Nov. were somewhat as expected, but December was a pleasant surprise. January was worse, but so far, February is looking stronger. It's like a Katy Perry song.
Nicholas Hebb Send private email
Thursday, February 12, 2009
Things have looked considerably better here since Jan 1st as well - not quite to Jan 2008 levels, but close.
Jamroom Brian Send private email
Thursday, February 12, 2009
No real sign of a recession in my market (yet). People will still get married and my product is still better than the competition. ;0)

The media and the politicians seem intent on talking us into a depression however...
Andy Brice Send private email
Thursday, February 12, 2009
TOH's company is turning work away because they have more coming in than they can do and don't want to take the chance of growing at this time just in case.

However, my job hunting isn't going well. Every morning, I get the same two jobs advertised at me AGAIN, through some different agencies. Which is dull. And no-one seems to be actually hiring.

So I'm working on my own projects in a window over here ------->
Katie Lucas Send private email
Thursday, February 12, 2009
I certainly don't see any sign that the tech recession is over.

My recession started back in Sept 07.  Before that my sales were growing 40% quarter-on-quarter and then suddenly - bang.  I am based in the UK and sell business financial software and it was about this time the first bank over here almost went bust and there was a run on the bank and it had to be bailed out by the gov.  From that point on my sales have declined steadily.  There is absolutely no reason for the decline from everything I've looked at.  People just stopped buying.

More recently - Aug-Oct were absolutely terrible but Nov-Dec picked up quite nicely.  However Jan again was horrible and Feb is fairing a little better but not much.  Compared to July 07, my best month and the last before it all started to go wrong, my business is down around 40% :(
Gz Send private email
Thursday, February 12, 2009
Thankfully business has picked up again at last after it flatlined at the end of last year. We are based in the UK providing marketing materials and web solutions and are getting some really interesting big opportunities arriving again.

I think people have realised that the world is not going to end and have to keep on functioning. The big problems seem to be in businesses that have had their overdrafts and credit refused even though the business is still going strong and so have to make hard decisions for the short term.

My sympathies go out to all those made redundant though as generally the printers are suffering really badly.
rhona gilmour Send private email
Thursday, February 12, 2009
November was great for us, December bad, January bad, but things have been picking up a bit of late.
Giles Thomas Send private email
Thursday, February 12, 2009
Well for the first time in about 6 months I've started receiving calls from recruitment agents again....
Mark McLaren Send private email
Thursday, February 12, 2009
Is the January uptick similiar to the uptick from Dec 07 to Jan 08?

I know that where I work, it is traditional to lock down spending in the 4th Quarter and re-open spending in the 1Q of the new year.

If that is an industry wide thing,  I could see a January uptick in sales as more an example of seasonality as opposed to the recession being over.
James Weise Send private email
Thursday, February 12, 2009
The "recession" (I am not going to argue if we are in one or not, because it is obvious where we are as a country - UK) has been great for us.

Product sales are nearly thrice what we got in the pre-recession months, although it would be un-fair to use that as a metric, given we only launched around mid-2008. December was indeed a slow month, but January and February have been excellent and demand seems to be going up both in terms of traffic and queries.

Likewise, our service work has gone through the roof, with bigger businesses looking for more cost effective suppliers other than the big consultancies and small businesses spending more than ever.

We hope to create atleast another 2 jobs by the end of this year, which might not be a great deal generally, but is almost 100% growth for us.
Sarat Pediredla Send private email
Thursday, February 12, 2009
I launched the product when recession was kind of "declared" by everyone. I would think twice of doing it again... it was bad idea. Should have waited when things come down a bit...
Dima Send private email
Thursday, February 12, 2009
I think it's far too early to say - I'd really want to see another 6 months of data before proclaiming "Business as Usual".

FWIW we also saw higher than normal sales last month, after a slower than usual November/December. However, sales this month are (so far) significantly slower than in January.

We'll see. I'm not placing any bets yet.
Anna-Jayne Metcalfe Send private email
Thursday, February 12, 2009
Joel, you need to replace that picture of a Bear with a Bull, ASAP.  Perhaps a mechanical one since the focus is on tech, naturally.
Lucky Lisp Send private email
Thursday, February 12, 2009
Had my best month ever in September 08, which was quickly beaten in October 08 and yet again by an even bigger margin in Jan 09.

I wouldn't say the recession is over, however I would say it isn't really affecting those of us who are much smaller, smarter and agile. Many of those losing their jobs are in bigger bloated companies who've hired too many during the good times.
Martin Pilkington Send private email
Thursday, February 12, 2009
While I'm not in a sales role myself, I have seen the rate of new custom software projects among existing customers drop off a cliff in the past few months.
Jonathan Cortis Send private email
Thursday, February 12, 2009
Joel Coehoorn Send private email
Thursday, February 12, 2009
I'm a freelance writer/editor with several tech clients, so I'm a bit of a tangential data point...but in any case, this has been the strongest 2 months in the past few years. It's quite reminiscent of late 2001, when business picked up in the wake of a tediously slow summer and the events of 9-11. I always felt like the mood was, "Well, if the world is gonna end, we might as well be busy." Hopefully the counterproductive talk (and financial foolishness) in Washington will cease at some point--folks need to get back to business as opposed to waiting for some sort of miracle.
Jake Poinier Send private email
Thursday, February 12, 2009
According to Patrick's stats, he'll have the best month since launching BCC. :)
Hanzo Send private email
Thursday, February 12, 2009
We had a relatively calm end of 2008, but our January numbers picked up at a faster pace.

The numbers varied greatly by product offering, but the most interesting part was the more expensive services outpaced the less expensive services as a percentage increase.

Our biggest percentage gainer for http://www.dyndns.com was the Spring Server, with more modest growth in our more veteran services (DNS, domain registration, etc.). It's odd because there's definitely huge differences in cost structures for the services (we're talking more than $50 per month versus less than $5 per month), and I expected the less expensive offerings to pick up more steam than the more expensive offerings.

All eyes now on February!
Cory von Wallenstein Send private email
Thursday, February 12, 2009
A friend who's out of work says he's seeing a bit more interest the last few weeks, so maybe there is more activity (and so more money for hiring as well).
cal_programmer Send private email
Thursday, February 12, 2009
I check montly sales by normalizing them against a two year moving average.  Here's the results for the last 5 months.

September 2008 - 1.08
October 2008 - 0.92
November 2008 - 0.70
December 2008 - 1.16
January 2009 - 1.40

November 2008 was the worst month I've had since October 2006.  January 2009 was my best sales month ever.  I dont know if things have turned but they certainly are better.  By the way February 2009 is looking like a 1.20 month.

Mark Nemtsas Send private email
Thursday, February 12, 2009
We saw a similar picture to others here:

Sep and Oct were our best ever months
Nov and Dec about 70% of Sep/Oct
Jan about 95% of Sep/Oct
Feb looking good so far

The quarterly GDP figures from the Dept of Commerce showed a 27.8% decline in spending on equipment and software in last quarter of 2008.

Mark Rogers Send private email
Thursday, February 12, 2009
One more item:

A job lead list that I subscribe to, and which has had two or three items a day for months, suddenly had about 15 postings today.

Maybe everyone was holding their breath waiting for stimulus package to get passed.
cal_programmer Send private email
Thursday, February 12, 2009
I contract in the area of SQL Server (05/08) and Im seeing more contract jobs lately than I have seen in the last 12 months here in Brisbane, Australia. So Im confused where the recession is !? Im actually quite confident that there is work for me regardless at the moment.
Paul Scocthford Send private email
Thursday, February 12, 2009
At my day job we sell B2B software with a lot of custom projects. We have been ridiculously busy since the beginning of the year. Unfortunately in November we cut 10% of our staff because the company expected a long recession. Now management wishes they had some of those people back because we can't handle all the work.
Neal Send private email
Thursday, February 12, 2009
According to this this forum, people around the world frantically buying software to overcome the crisis. Now.., how is this possible? What are you guys selling? :)
Dima Send private email
Thursday, February 12, 2009
December was really bad but things are back to normal. Sales have bounced back in Jan & Feb so far.

But I wouldn't say the tech recession is over, things are just getting started. I think november & december being holiday season the sales were low for most b2b products.

Our exposure in the US market is just little over 45% and we have seen new sales come from new regions like middle east and asia. We have seen slow sales from regions like UK and Australia.

I think to really analyze the recession effect, a country wide analysis would help.
Shalin Jain Send private email
Friday, February 13, 2009
I think it depends much on a company and a market it operates in. In my area (Poland) there are companies which were recruiting developers like crazy all the time, which is by the way a great idea to overtake some great specialists from competitors.

On the other hand I know of companies which still think more how to preserve business since their sale volume didn't move anywhere up after q3/q4 drop.

My feeling is that now it's good time to do some investments (new product etc). It's easier to get great people and they're cheaper too. Many companies will stay on their defense lines for a longer time so there will be less competitors to look for the gems.
Pawel Brodzinski Send private email
Friday, February 13, 2009
So far we've been unaffected. Our order base has been absolutely stuffed for the past 6 months or so. On the other hand, the big players here have been laying off people quite a bit lately. Me thinks it's just a proof that quality sells even - or especially - during difficult times, and since the bigger companies aren't exactly revered for the quality of their work, they get a bigger slap in the cheek.

But this is in Finland. Don't know how it is across the pond.
Timo Saikkonen Send private email
Friday, February 13, 2009
For us contractors, I suspect many companies are using the recession as an excuse for demanding rate cuts regardless of whether or not their own business was really all that affected by it.
Carlos Castaneda Send private email
Friday, February 13, 2009
A friend-who-shall-remain-unnamed said he laid off several developers near the end of 2008 and is now scrambling to cope with an influx of new work in 2009. It may be "the end of the recession" or it may be some kind of "January effect" having to do with new budgets etcetera. We'll know in April.
Breck Carter Send private email
Friday, February 13, 2009
I suspect that this may be part of the whole "do more with less" fad that companies are adopting.

They key to doing more with less has always been software (replacing employees, usually).
AaronL Send private email
Friday, February 13, 2009
The company I work for had an awful Q4 (December was worst), but Jan was noticeably better. Mind you, we're not even in the IT business.
uwf Send private email
Saturday, February 14, 2009
We don't sell to the tech field. We're in health care software.

2008 was good.
Last quarter of 2008 was up, but not as much as the rest of the year (so technically a slow down in growth).

2009 Looks about flat compared to 2008.

So.... we're still holding our breath about the impact of the recession.
Mr. Analogy Send private email
Saturday, February 14, 2009
I'm a contract web developer.  I lost a client that wanted half of my time in November (they were a consumer product company that decided to shelve ecommerce plans for the foreseeable future).

I hunkered down and prepared to survive by cutting costs.

But in Dec and Jan I was contacted by 4-5 new and past clients for work, so now I'm as busy as I want to be.  One major current client had cut my hours in Oct (they're seasonal) but are planning to bring my hours back to last summer's levels.

Oh yeah, and I raised my rates in Jan too.

I'm in flyover country in the USA.
Dan Moore Send private email
Saturday, February 14, 2009
For me, Sept-Nov '08 were bad. December was surprisingly ok-ish -- people used to spend December buying other things that a vi emulator, it seems vi became more xmas-ish this year. January '09 was bad again. February is being worse yet.

I don't see no end to the recession here. Let's see what happens. Whatever it is what is coming, it'll catch me working.
Jon Send private email
Sunday, February 15, 2009
In many ways this industry has done reasonably well during recessions.  Microsoft grew up at the end of a major oil crises/recession, as did Apple and others.  Windows took root during/at the end of one in the late 80's early 90's.  The dot com bust was more an adjustment than a decline.

However.  I honestly do believe we are in the eye of the storm at this stage.  That doesn't necessarily mean it's going to be horrible on the other side - but then it doesn't mean there won't be some nasty shocks (or worse) either.  The world has never sustained this much debt, in quite this manner.  Predicting accurately is impossible and there's to much disinformation floating around in the press, politics and the "internets".  ;-)
Scott Kane Send private email
Sunday, February 15, 2009
I think it may simply be due to technology’s core competency – improving productivity. While the recession has been severe, there is still work to be done. Technology allows managers to get the necessary work done by improving the productivity of their remaining staff.

I’m not sure it is a leading indicator of recovery however. It could be argued that this is a result of the reduced staff size rather than growth.
Marc LaFleur Send private email
Monday, February 16, 2009
I worked for a consulting firm and they laid off a significant number of consultants during December and throughout January. The layoffs have ceased, and word is they might be rehiring. 

I left to join a startup which is very well funded.  The fact that there is a dotcom startup, which is well funded is a good sign I think as well.

Perhaps everyone was scared out of their minds at the end of last year and the sun is slowly rising on a new year, and Obama's hope mantra.
John Marchetti Send private email
Tuesday, February 17, 2009
Q4 and Q3 2008 were good quarters with Q4 being our best ever, which was quite suprising, given the massive fallout in the financial sector and job cuts across large enterprise companies. I attribute our success in this primarily to the re-architecture and re-implementation of the core product that took place over 2007 and which was released mid 2008. This reflects how bad the old product was compared with the new version of it.  The effort put into re-implementing it seems to have paid off.  We are in Australia but export globally and therefore are affected by the global financial crisis. Certainly, if things were normal during Q4, we would have had more sales.
Sashan Govender Send private email
Wednesday, February 18, 2009
"Does this jive with your experience?"

Jive should read jibe.  I only point it out because I was also confused about the meaning of jive until I looked it up.
Tim Sawtell Send private email
Wednesday, February 18, 2009
I often think that tech recession haven't even started yet - we're way down the line in the food chain.

Perhaps what you saw in autumn was mostly echoes of autumn 2007?
Boris Maryshev Send private email
Wednesday, February 18, 2009

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