Doerr: Obama's tech focus and how tech companies can ride the storm

Venture Capitalist John Doerr, appearing at the Web 2.0 Summit, said that there are thing that the incoming Obama administration can do to help the tech industry, starting with a focus on energy, basic research and higher education - the recipe that started the Internet.

"We need more smart people" in engineering and the sciences in the U.S., he said. One of biggest downfalls of the U.S. is that we allow foreign students to come into the country, be educated in some of the best universities in the world and then send them home. What kind of policy is that, he asked? Instead, "we ought to be stapling a green card to their diplomas."

The country also needs to invest in innovation and research in alternative energy technology. The U.S. has "just scratched the surface" as it relates to finding clean ways to use energy to create energy. "It is the challenge of our generation," he said.

As far as advice for startups in this economic climate, Doerr says they need the companies need to hunker down, take a long view and avoid cutting with a meat axe. He says startups need to be smart, stay focused on the core of the business and get ready for the long haul. He also offered 11 piece of advice.

1. Act now and act with speed. Be sure to secure that financing now.
2. Protect the vital core of the business. Cut once and cut deeper than you think you need to. You don't want to do it again.
3. Have 18 months worth of cash on-hand and know where you stand with investors. A year's worth of cash isn't good enough.
4. Defer facilities expansion. Don't spend where you don't have to - not even on software you don't need to run your business. (He name-dropped Google Apps as a good money-saving alternative.)
5. Re-evaluate R&D priorities.
6. Renegotiate all of your contracts, including leases. You'd be surprised what can be re-negotiated these days.
7. Everyone in company ought to be selling the company's value proposition - from marketing and sales folks to the techies and the receptionist.
8. Offer equity in the company instead of cash.
9. Secure your cash in treasury securities. not money market funds. No one knows what will happen in the financial markets and he says we could still lose a major bank.
10. Figure out the leading indicators of business engagement. What are the key things you can do so you can react quickly?
11. Overcommunicate. With everyone. Family, customers, employees, vendors. Don't sugar coat where things stand in this climate.