Both. When the last bubble hit, the advice given to startups was:
1.) If you're in a position to raise capital, raise money now, because the funding window may not be open for a long time.
2.) Cut burn rates immediately.
3.) Get to cash-flow positive.
4.) Cut non-essential features, and focus on customers that are willing and able to pay.
It's usually not practical for a startup to change its entire business model (although LoudCloud did it in the first dot-com bust), but they can trim fat, and stop doing activities that aren't absolutely essential to generating revenue.
1.) If you're in a position to raise capital, raise money now, because the funding window may not be open for a long time.
2.) Cut burn rates immediately.
3.) Get to cash-flow positive.
4.) Cut non-essential features, and focus on customers that are willing and able to pay.
It's usually not practical for a startup to change its entire business model (although LoudCloud did it in the first dot-com bust), but they can trim fat, and stop doing activities that aren't absolutely essential to generating revenue.
http://venturebeat.com/2008/10/10/the-sequoia-rip-good-times...