BY JOHN LANCASTER
Chief Executive Officer and Cofounder,
Aspex Technology Ltd.,
Uxbridge, England

For a startup that has yet to generate revenue and that is not yet beholden to customer orders and shareholder concerns, the slowdown can produce some positive outcomes. New project opportunities mean that a company such as Aspex is given more time not only to produce silicon, but also to tailor it to specific customer requirements.

By their very definition, pre-revenue companies do not see declines in their revenue streams during depressed markets. Consequently, their budgetary plans are not particularly disrupted and income remains secure. Moreover, project cycle times don't slip in the way those of revenue-dependent companies might.

Aspex's underlying mission is to supply programmable high-speed signal-processing devices to its three principal core markets: communications, networking and imaging. With DSL and 3G acknowledged as being the major growth areas in 2002 and 2003, we feel that, long term, the outlook for a DSP chip company is bright.

Therefore, we are concentrating on providing the platforms that can help kick-start and maintain the next high-tech upturn.

There are, however, obvious challenges facing startups, and it would be erroneous to paint a too-rosy picture. Developing product in conjunction with the company brand is a capital-hungry activity. Fundraising is the sole source of life for a startup, and this is the potential stumbling block in its progress.

Make no mistake, the money is still out there, but unlocking it is a more arduous task. Fears about the downturn in the equity market results in an air of caution and uncertainty in the investment community. Potential investors-who are not seeing a return, or are not able to realize their returns in the time frames they initially thought-are more apprehensive about parting with their money.

However, this too need not be much of a concern, especially if you have a strong product offering. A sound investment is a sound investment no matter what the financial climate. You may need added patience while the whole process remains languid, and although I don't have a crystal ball to predict the end of this depression, what I do know is that when we do see confidence return, Aspex will have used the interim period to advance product. My philosophy is that if you can provide a high-quality product, aimed at the right customers in the right markets, you will be successful. It is these underlying principles that will steer any ship, be it startup or multinational conglomerate, through troubled waters.

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