5 things to help survive the downturn
First off the sky is not falling, but pieces definitely are and if you are not careful you will get blindsided by a falling chunk and may not survive. I am an old man of the internet (relatively speaking) and managed to make some good money in the downturn times of 2001-04 – enough to start a vodka brand and open a bar (some non-tech things I had always wanted to do). In 2001 everyone was going out of business, people panicked train wrecks were everywhere. I was one of them. I was fired from the business I started (rather asked to step down as CEO – same thing though) and my ‘company’ brought in a new executive with some grey hair, which turned out to be the right move as they are still in business today and a leader in their field.
So some key takeaways:
Don’t Panic (i.e. Be Certain of the Uncertainty) – Paulson (or mr chicken little as I like to call him) is sending panic waves through the public. He says one thing then does another. On top of that the market is a wild ride and is just getting started. Know that you (or really anyone) doesn’t have the answers. Know the dynamics of your business and position may change. Don’t fire 40% of your staff and especially not sales people just because your are looking at your runway. You eat with your mouth. The companies I saw that did massive layoffs started a death spiral because moral dropped and direction wandered.
Consult – Keep money coming in. Get you and your staff (if you still have one) paid for your and their time. This not only helps out with cash flow and your ability to potentially develop new models but it lets you know what the particular developments in your market are.
Un-focus – Get your fingers in pies. Know what is going on. A down turn means a lot of monies, consumer habits, etc are shifting from one place to another. Find that trend and find ways to leverage it. This sounds obvious, but maybe don’t put so much time into one project and test out another in a different industry.
Re-Position – Organizations and people will start looking at products and services with a familiar standby “will this save me money” – this goes for everything from clothes to business productivity software. It’s not how this software can make you money, its how this software can save money.
Productize – If you have product that has market value, get it out there. Companies are always doing build vs buy and knowing that don’t have to support a long-term development staff is very appealing right now. Also amortize your product price or sell it as a service. Everyone wants even cash-flows with no long term commitments.
Really my main point is that the internet is not going away. Yes VC/Stage firms will not be giving out money, but internet usage will continue to increase especially as people turn to it for ways to save money, affordable entertain themselves and stay in contact with less travel. All of these points relate to one two issues – cash and morale. Everything you do should be directed at keeping money coming in and motivation/spirits high. Everyone will be fine, and growth is possible, just not the way we thought.
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