Official - the End of the FreeConomic 2.0 model

Sequoia Capital has called the end of the Good Times in bubbleventuring, as GigaOm notes:

The fund organized a meeting yesterday where it invited entreprenuers/CEOs from its portfolio companies. The attendees were greeted by a cute image of a Grave Stone, with a message: R.I.P.: Good Times, my sources tell me....

They want the companies to cut costs, to figure out way to survive and emerge at the other end of this downturn, which could last years. The speakers went through each functional area of the business and told the companies how to cut costs. By holding this special meeting, Sequoia is telling its companies to put survival strategies in place and figure out ways to outlast the broader market troubles.

Let me translate that for the FreeConomists out there, to those people who believe you can run business models with no visible means of making money - it means that they are not going to put any money into existing funded businesses that don't have a P2P strategy (yes, its time to resurrect that dotcom word - it means Path to Profitability). And they certainly won't fund any new businesses without one.

And when Sequoia panics, the thundering herd will stampede after, as Howard Lindzon notes... but he also has some sage advice:

I have been telling any of the CEO’s that will listen to me, to THINK about how we turn this panic into an opportunity. We all have weak investments and weak CEO’s, but a blast email on October 7th is absurd. Anyways, I am poor and they are rich, so that’s that. So while the rest of the world panics, you can panic too, or you can take a few steps back and remember how fortunate you are to be reading this blog, because if you are, you are ‘Too Small to Fail.’

Of course, this is what happened in Web 1.0 as well - after whipping companies to "grow grow grow" at all costs, the SV VC community suddenly turned round to all the dotcoms and told them to start breaking even as of yesterday. The pendulum swing from hype to hopeless in a very short time. Its very hard to turn around that fast when you have supply and delivery contracts you then have to get out of, people to fire etc, but far better take the pain early.

And put the FreeConomic kool aid packet away.....