Yesterday, we attended Tech Crunch Talk in London where the main theme was: 'Crunch Time: how is the startup community, both companies and investors, affected by the credit crunch?'

First, host Mike Butcher, who in his travels in Europe at various startup communities, saw no drop in activity in Europe. His explanation: most European startups were very used to bootstrap during startup activities, as people never had money in the first place (as opposed to the Valley).

After that, the German startup Qype, local search 2.0, took stage. With their relatively large investment of 1,5 million Euro, they took 22 months to sell their first add. And this was actually the only thing which founder Stephan Uhrenbacher said he would have done differently, looking back, and he advised startups accordingly. Otherwise, he was pretty positive about the effects of the credit crunch. He showed some interesting figures, like the monthly costs to set up business in Brasil (2500 Euro), which meant that international expansion was very much possible. And the number of competitors since 2006 (32) and since 2008 (0), which for a startup in business is a favorable development. As their market share is 0,05 % (of a 5 bn yellow page market) revenues increased with a factor 10 since January 2008.

He further pointed out that the crisis in Germany was at least 6 months shorter than in the UK, while in Germany the problem is not how much debt can people have, but how much more can people save (cars are usually 8,5 year old before being replaced). As for their activities in the UK it never was better: The lease was affordable after a 80% drop in the lease price. And no more outsourcing to Eastern Europe was necessary, because good people were for hire in the UK, without any unreasonable salary requests. He said: "All of a sudden the UK is affordable, you can do more in the UK!"

For your information the definition of Crunch Time: A critical period of time, during which it is necessary to work hard and fast.

(to be continued)