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.
…So here’s my message for 2009: Don’t let risky times dull your appetite for taking risk. More then ever, companies and their leaders have to offer a positive alternative to a demoralizing status quo. So why wouldn’t you move now to shake up your market and transform your company, especially when rivals are too timid to respond? All it takes is a good idea — and some animal spirits.
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
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
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
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
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
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
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
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)
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
3) Tech is everywhere. It’s seven years since the
last recession. Technology has become markedly more pervasive in that
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
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