Today, driving short-term revenue is the only thing on a startup’s mind.

Since the economy dove into the dumps, the Silicon Valley fairytale of huge valuations for startups that acquired users by giving everything away for free (thinking advertising was the one-way street to the revenue promised land) is over.

It’s been over since Sand Hill Road had a “come to jesus” moment with its funded startups – and the message was heard loud and clear across the startup world: cut costs, generate revenue, and keep a safe amount of money in the bank at all times.

Now let’s counter that message with the mantra that a recession is the best time to start a startup.

So for those of you who’ve taken the plunge, and didn’t accept tens of millions of VC dollars before the collapse, how do you generate revenue while keeping costs low in order to build a resilient startup with long-term potential a profitable future?

Last night’s Dealmaker Media Strategy Series (hosted at Morgenthaler) brought together veteran entrepreneurs and VCs to discuss just that. (A big thanks to Manatt, Phelps & Phillips and Microsoft BizSpark for sponsoring this event, too!)

Manish Chandra, CEO, Kaboodle moderated the discussion asking some great questions, including:

“If you were to give the Twitter team advice for turning on short-term revenue, what would you say?”

The speakers included:
Karl Mehta, Founder & CEO, Playspan
Lance Tokuda, CEO, RockYou
Munjal Shah, CEO, Like.com
Rebecca Lynn, Principal, Morgenthaler Ventures

Some Highlights from the Conversation:

* Smart Revenue vs. the Quick Buck: Driving revenues in the short term without abandoning your focus:

“When the economy collapsed, we decided to focus on releases that could make us revenue within the next six months, if not – it was canned.” Karl Mehta.

“…If someone is willing to give you money right now, take it. Don’t fear diluting your stake in the business and refuse investment if someone is willing to give you a cheque. What’s worth more: a bankrupt startup founder or a founder with a startup that’s alive?” – Munjal Shah

“A sure fire way to revenue is by building something people are already paying for, but making it better, faster, cheaper and more compelling than anyone else has to date. You don’t all have to be YouTube’s.” Rebecca Lynn.

…Karl also pointed to an example from one of the attendees who took corporate investment in hopes it would fund their larger goals, but it came with so many development deliverables for the funder, it drove his entire company down the wrong path for nine months, losing precious product development time.

* New Ways to Monetize Your Product: Is virtual currency the savior? Are there other new revenue channels you’re not tapping?

…Karl, Lance and Munjal all agreed strongly that virtual goods are a proven way to revenue, pointing to the long-standing adoption of virtual goods in Asia over the past 7+ years.

…Freemium, subscription, lead generation, revenue shares, etc.

* Beyond the Ad: For ad-driven startups, what more can you do when advertising is down? Is it all or nothing at all?

…Lance argued strongly that unless you have a top 20 Comscore rating – the chances of generating enough ad revenue to keep your business afloat are bleak.

“No one should rely only on ad dollars. You need other revenue streams such as subscriptions, premium content, etc.

…….

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