I believe there is no good or bad time to start a startup. As far as economy is concern, it's more dependent on the perspective you take to look at it. I work for a software maker up in northwest, and everytime I think about opening a startup, I meet a few people suggesting against it with economy as the reason. When the economy is good and our company's stock is going up, the normal advice is:"you know you will be much better-off sticking here for some more time because we are doing so good right now." And now when the economy is down and our stocks are hitting the bottom, the advice is: "this is not the right time to leave the company and open a startup. You won't get funding and with our stocks so low, you will be broke bootstrapping your startup." My perspective: well I got a good idea and great co-founder, let's go for it. We will figure how to survive the economy on the way.