After I penned CIRCUIT, Dumb Company, and Dead Company, but before I penned Dead Company II, Brian Soils authored a great post over on TechCrunch on how Fear Kills Busineses, Dead. Noting that recessions naturally inject fear and panic, Brian also noted that fear is not a catalyst for productivity. Fear, and the dissemination of distress, slowly erodes hope, vision, and ambition, ultimately killing businesses instead of guiding them.
For example, just look at the deeply misguided advice that Sequoia Capital has issued in fear: don’t worry about getting ahead, instead, just survive … cutting deeper and quicker is the formula to survive. As I explained in Part II, it’s actually the formula for a slow and painful death! You’d be better off doing a Boo.com and wasting it all on lavish parties … at least you’d have some fun before you joined your brethren in the unemployment line.
As per Brian’s post, you need to instead take the advice of CEO Steve Larsen of Krugle who advises don’t be stupid. Have enough cash to run your business, but … look for opportunities. Difficult times are when they’ll most likely occur. When we’re at a ‘steady state’ and things are normal, good opportunities are much harder to find with GREAT opportunities nearly impossible. It is during periods of tumult and transition when you can spot things that lead to the greatest returns — if you are alert.
More importantly, as I pointed out yesterday in Part II, if you choose to stop vying for customer attention, the world will move without you. In other words, you’d be better off putting up a “going out of business sale” sign than cutting your marketing budget … at least the former will garner you some attention. As Brian notes, the recession is temporary, but business is constant, and, more importantly, if you’re in spend management, this is the time when your business can pick up sharply. In other words, if you haven’t increased your marketing budget lately, this is the year to do it. As long as you develop an innovative and cost-effective marketing strategy, you’re sure to get a return on your investment … and if you play your cards right, you might see a return beyond your wildest imagination. After all, as Brian notes, customers are and will continue to research, invest, and procure the solutions, services, and products that will help them succeed, offer entertainment, or streamline aspects of their day-to-day workflow.
Focusing energies on generating revenue, increasing visibility, and enhancing customer loyalty are the most effective strategies for underwriting longevity, and [hopefully] growth, especially during an economic downturn. Remember, customers do not typically go out of their way to “discover” your products. If they don’t see you in the places, like Sourcing Innovation, that they typically go for information, they’re not likely to see you at all. Smart marketing is your conduit to connecting prospects to your business.
Tomorrow’s Leaders Are Born Today.
So what are some things you can do to keep you off of the dead company path? Stay tuned for part IV!