Good recession reading

We are in a recession - if it hasn't hit you yet, come back and read this later! We started feeling it six months ago and we are taking a beating this month. If you are feeling it now too - here's some good (and politically incorrect) reading for you.

(The) Startup Depression and Good News for People who Hate Bad News by Jason Calacanis

10 Specific things you can do

Since the outside market is out of your control, the best you can do is focus your energy inward. Here are some things you can do after you’ve assessed where you company is at.

1. Execute better: This is fairly simple, as I describe above. Rank yourself and your performance and improve it.

2. Grow the talent you have: When the market is down, it’s a great time to get your team educated and to the next level. Invest in training and education of your top people, because they are the ones who will lead your company through this mess.

3. Firing the average people: Again, it’s totally politically incorrect, but I highly recommend firing anyone who is good or average. Startups are an Olympic sport and every slot on your team is critical. You wouldn’t put a “good” swimmer in a relay, would you? Don’t have one in your startup. Fire the good and replace them with the great.

4. Cut spending every where you can: Recurring costs like connectivity, phones, rent and insurance are things that you can easily cut. Go to each of your providers and ask for 20% relief immediately or you’re leaving. Most, not all, will give it to you.

5. Find a revenue stream and ride it: If you don’t have a revenue stream right now, you’d better find one on Monday. Seriously, by the end of the day. Once you find this revenue stream, ride it. Put at least 25% of your effort into bringing in revenue.

6. Focus on your profitable clients: If you have revenue, start focusing on which clients are most profitable. Take them to lunch and figure out how you can over-service them and sell them another product (or more of your current product). You’re gonna want to protect these accounts because the folks reading Point Five are going to be calling them!

7. Make your top ten 10% better: Look at the top ten aspects of your business and come up with a plan to make each 10% better in the next 30 days. Ask everyone in your company to make suggestions for the 10% better program and execute on the ones that will provide the most bang for the buck. Sometimes, there are things you can do today that will make something 10% better for free–you just haven’t brainstormed enough.

8. Hold an optional off-site breakfast meeting on a Sunday and see who shows up: If folks don’t show up for you to grow/save the company on a Sunday for a two hour breakfast, they probably aren’t going to step up when the sh#$%t really hits the fan. You need to know who the real killers on your team are and you need to get close with them now. Again, it’s fine to have 9-5ers on your team–if you’re the Post Office. You can’t have them at a startup company. Note: if you reading this and saying I’m anti-family, save it. Folks don’t have to work at startups and some of the hardest working folks I’ve met have families and figure out how to balance things.

9. Build marketshare: One of the best things to do in the down market is build marketshare. Look for competitors that are going out of business and buy them or just “steal” their clients and talent (i.e. pick them up).

10. Raise money: I know I said above most folks won’t be able to raise money in the down market, but that’s not because the money isn’t out there–clearly it is. The issue is that the big money out there doesn’t want to fund small ideas that are in the death spiral. Build a plan based on revenue and taking market share and folks will consider funding you. What ideas do you have for winning in a down market? How do you stay inspired in bad times?

 Taking Advantage of a Down Market.  by Keith McFarland

Excerpt:

Get rid of the deadwood. When the market turns downward, leaders have the opportunity to prune away the deadwood in their organizations in a way that makes them more efficient, and that positions them to hire the best and the brightest in the industry when business picks back up...

Focus your resources. Just as companies tend to accumulate mediocre performers during the good times, they also often add projects and initiatives that, when examined in the harsh light of an economic downturn, don't represent the best use of the company's energies and resources...

Go shopping. When the going gets tough, the tough go shopping. If you were smart enough to keep some powder dry, you might be in a position to turn the downturn into a win. That's because during an economic downturn, a lot of things go on sale...

Why this tech recession will be different by George F. Colony (to cheer you up)

Excerpt:

1) Tech will be down, but not out. 2001-2003 was a tech depression... Users of technology are far more disciplined and have cut out the nonsense. So yes, growth will slow, but it won't fall off a cliff.

2) Transformation and innovation will lead recovery. CIOs and CEOs are telling me that they plan to change their way out of this mess...

3) Tech is everywhere. It's seven years since the last recession. Technology has become markedly more pervasive in that time...

4) Customers live on tech. The consumer landscape is very different than it was in 2001...

5) Tech issues are burning. There were no big tech changes afoot back in 2001-2002. Not true now...

The First-Time CEO’s Recession Survival Guide by Glenn Kelman

Excerpt:

1. Compete With Your Successor

I often think about what my replacement will do after I’m fired. She won’t have emotional commitments to decisions that I already regret. She’ll look at everything as an outsider—as a customer—refusing to tolerate problems that have lasted so long I’ve forgotten they’re there...

2. Act Like an Owner

When I was still settling into being a CEO, I wasted a lot of time driving initiatives designed to please others, acting as if someone wouldn’t let me do what I wanted to do with Redfin. My moment of clarity came when a board member said, “as far as I’m concerned, you’re the owner of this business.” And he was right: you won’t own all the proceeds if the company succeeds, but you’ll certainly own a failure in its entirety. This sparked several reptilian impulses:

• “I can’t blame anyone else if this sucker goes down.” This made me feel powerful and savage, like Arnold at the end of “Predator.”
• “If it were all my money, I’d invest it in Redfin today — but there’d be some big changes around here.” We’re making those changes now. (This is about focusing on the part of the business that you really believe in.)
• “If we had to get our wallet out every week for that expense, would we?” (This is about focusing on the part of the business you don’t believe in.)