"I guess it's a little masochistic or sadistic or something, but kind of excited about the upcoming recession," Cloudflare CEO Matthew Prince told Insider.Mike Blake/Reuters
- Cloudflare CEO Matthew Prince said his company is prepared for an upcoming recession.
- According to Prince, who spoke to Insider at the World Economic Forum, economic downturns can have a silver lining.
Cloudflare's CEO Matthew Prince said he isn't breaking a sweat over an upcoming recession. In fact, he said he's looking forward to one.
Speaking to Insider at the World Economic Forum in Davos, Switzerland, on Thursday, Prince conceded that "this is certainly the worst economic conditions that we've seen in the history of Cloudflare," which was launched in 2010 after the worst of the 2008 financial crisis.
Still, Prince said his cloud and cybersecurity company reacted quickly to dark clouds in the economic forecast and slowed the pace of hiring sooner than other major companies like Amazon, Meta, and Microsoft, which all recently conducted mass layoffs.
"If we hired at that pace, we'd be doing layoffs, too," Prince said.
However, Cloudflare hasn't been entirely immune to the downturn in tech: Its stock has fallen more than 50% since January of last year.
Nevertheless, Prince said he's looking on the bright side: "I guess it's a little masochistic or sadistic or something, but kind of excited about the upcoming recession."
Here are his reasons why:
1. A potential startup boom
Prince predicted that mass layoffs and hiring freezes might force driven and ambitious people to get creative with their careers.
"I think you'll see a really interesting crop of new cool startups get built out of this time by people who right in this particular minute are freaked out and scared, not quite sure what they're going to do because the path they were on didn't work out," he said.
Prince pointed to his own company, Cloudflare, which was born out of the '08 recession.
"Michelle, she interned at Google, and it was one year that Google didn't hire any of the interns... so the fact that she didn't have a job at a big tech company, she was willing to come hang out with me," Prince said, referring to Cloudflare COO Michelle Zatlyn, who was the third person to join Cloudflare in 2009 before it launched.
2. It might be a good time to invest
Prince said big-money investors tightening their purse strings for fear of a recession could create an investment opportunity for others.
"Everyone's retrenching. All the VCs are pulling back, and capital is getting pulled out of the market," he said.
"This is definitely the time you want to invest. Whether that's someone who's investing in a new venture or whether that's us making sure we look across our team and say, 'Okay, we know who the people who are really, really great, and then where are the places we can continue to hire," he added.
3. Companies may become more efficient
Prince said he saw a lot of "froth" in companies over the past few years, and losing some of it may not be a bad thing.
"If we can all get a little bit more efficient, if companies come out the other side of this and are a little leaner, a little bit better at doing things, and have that discipline," he said.
"I think we're going to be one of those that survive... and we're going to be much, much, much stronger," he added.
4. Some of the strongest talent is hired in recessions
Prince pointed out that CEOs of some of the biggest tech companies started in lower roles at those companies during economic downturns, including the current CEOs of Apple, Google, and Microsoft.
"I look at Cloudflare, and we're 3,500 employees, but the people we're hiring today are going to be the people who, when someday I've decided to retire, which is still a long ways out... will able to run the company over that long term," he said.
"I think that's kind of cool and exciting," he added.
