We as in US citizens. George Soros has done a great job of living within his means and obviously so have you, but WE as in at least 43% of Americans haven't. Also, YOU (i.e. WE) keep electing these freaks in Congress and in the White House. Why do we have a 10 trillion dollar debt? Why do we think we can keep borrowing year after year?
Of course it is easy to build cash reserves if you are an established company, but an early stage services company would be hard pressed to work without short term credit.
A world without short term credit looks a lot like the third world. I prefer living here (at least I used to).
I was only referring to the practice by banks of freezing credit lines for small companies. This WILL create a snowball effect forcing companies to close their doors. We have to figure out a way to inject confidence in the credit system...
The main problem we had was lack of capital to fund our expansion. We were in a catch-22 at the time. Our investors didn't want to give us additional capital until we had leased the 'hard-to-get' spaces within popular telco-hotels around the country. The landlords didn't want to lease us space until we had the money to build out the spaces (typically $10MM per location). By July 2001 we had more than $1,000,000 in monthly lease payments for spaces we didn't have the funds to complete. It was a nightmare. Once we filed Chapter 11 we were able to immediately reject the leases that we had not built out. By cutting heads from around 60 to 16 I think and keeping only our profitable or breakeven facilities we were cashflow neutral almost immediately. It took a couple of months and we became profitable. Of course, it was easy without the leases.
At the end of the day, if I knew that I would ONLY have $20MM to build my business I could have done a great job. The problem was that I thought I was going to have $120MM to build it - I built an infrastructure to support a $100MM business, not a $20MM. Does this make sense?
You have to give Tim credit, he came up with an excellent controversy. Of course, you all must realize that Tim doesn't follow his own advice. He admits that it took a lot more than 4 hours a week to write the book. He spends more than 40 hours a week promoting the book (even now). Get it? He doesn't believe his own thesis. Sure, it is possible, but for how many people? for how long? Not very many and not very long.