If you’re a startup entrepreneur looking for clarity about the current situation, you’ve also probably heard investors, analysts, and corporations speak of the economic meltdown as a time of opportunity. Opportunities are great. But what kind of opportunities are these? Let’s face it--it’s hard to see opportunities when you’re in the midst of survival planning. I mean, who cares about a smoothie when all you hear is “no more water until further notice”?
And yet, you cannot live in survival mode for long. For one, you’ll exhaust yourself: You’ll fail to evolve your product, you’ll likely minimize your marketing efforts which will result in reduced exposure, you’ll dwindle down your investment in user experience which will result in user defection, and, to finish it off, you’ll most likely miss rising competition that has been slowly catching up to you.
So what is one to do in the new Downturn Disaster Economy?
First, recognize and accept that these are unprecedented times. We’ve heard VCs, corporations, and veteran CEOs say the very same thing. Second, realize that risk is significantly higher. Third, accept that traditional growth paths (ads, eyeballs) are now blocked and intersections are piled high with debris. Fourth, know that you must, must, must do what you can to balance between preservation and preparation for capitalizing on momentum when the roads start to open—and they will. In short, nothing you’ve done to date is certain. It’s time to think differently, act differently, be resourceful.
Here are a few things you can do now, as you’re hunkering down, that cost you very little but can have great benefit once you’re able to move again:
1. Get creative. Remember your first days as an entrepreneur? What made you leave a cushiony job (or never get one to begin with) and start your own business? What drove you to do something that fails 9 out of 10 times? In most cases, it was an insatiable excitement for doing things differently, for innovating the way people think, for being part of changing this world and for making it big. Your idea may have become a business, but the core of ideation is innovation and creativity. It’s time to go back to basics and think differently. Turn your action plan into your own startup today—draw it on a napkin if you must—get excited about it and act on it now.
2. Get better. Tom Peters, creator of the famous The Pursuit of WOW! talks about excellence. ‘Get on with the business you have,’ he says,’ do it brilliantly, stick to the basics and keep it simple!’ Applying WOW! to what you do now (yes, even now—especially now!) means that when others scramble—your customers, stakeholders, partners, and team will turn to YOU for solid delivery—in good times and bad.
3. Be deliberate. Be Clear. Have you heard the story about the carrot, egg, and coffee beans that were put into boiling water? Which one do you want to be? Make a decision and do whatever it takes to be exactly that. Personally, I’d go for the coffee beans.
4. Take time to visualize success. Research shows that energy flows where attention goes. What you focus on is what you get. If you focus on making the chaos stop, all you’ll get is more chaos; if you focus on the stress, the change, the diminishing opportunities, it’s going to be tough to get anywhere else. So try something new. Take 10 minute a day to visualize where you want to be when all is well. Think about a time when you’ll be back in control and notice how things will have changed. See yourself there, in every detail, make it big and bright and fun. Ask yourself what information reveals itself to you that you can use now—then put it down on paper and get to work.
5. Plan ahead. Do you know what you’ll take with you if a fire breaks out? Most people have thought about it but never really bothered to put together a plan. They figure it’ll never happen or, when it does, that they’ll have plenty of time. Then they never do. This, right now, is fire time. Major winds are sweeping through the dry Valley. Do you know what you’ll do if the flames reach your backyard? It’s time to sit down and plan. What will you do next week? Next month? If your pool of anticipated revenue dries up as it had for many ad-based models, where will you turn? Make sure you have a plan on paper and revisit it regularly to make sure you know what to do at each step of the way.
6. Revise your strategy. Been pitching up and down Sandhill Road and not getting the warm and fuzzy? Focusing on a consumer market that has been shambling? The great thing about uncertain times is that while some people just scramble each day doing the same old thing, others see in it an opportunity to do different things. Imagine you came up with another idea that can make your product succeed. Instead of a website it’s an app. Instead of the US you’re going to China where the nouveaux-riche have 40% of their money in savings and are itching to spend it on cool new things. You’re an entrepreneur—an innovator—don’t shy from innovating your strategy too!
7. Practice leadership. Philippe Suchet, Former CEO of Kefta (sold to Acxiom in 2007 for an undisclosed amount), says this is the time to show leadership and to manage by excellence. If you cut 10%-20% in the past two months, most likely you’ll need to cut again, says Suchet. Do it once, cut deep, don’t fatigue your people with multiple attempts. Renegotiate packages, cut your own salary, and treat people well whether they stay or go. Then, realign the remaining resources around the most important thing for your business: either getting your product out to market or cutting deals on the existing solution. If you are able to persevere and your startup is a success, the leadership skills you acquire now will be highly valuable during times of success.
8. Step outside your circle of influencers. You’ve had great people as advisors and guides. They’ve been super successful these past 10 years. Maybe they’re CEOs with a number of exists behind them or investors who are extremely well connected. But are they the best resources for you now? Times have changed and so has the type of advice you need and there’s so much you may not even know you don’t know. So think who has been through downturns before, who has seen it all, think who can help you now and go get some face time.
9. Create a lasting network. It’s easy to network when times are good. Everyone’s happy and everyone wants to be your friend as the free champagne flows and hors d'oeuvres are being served. But during a crisis, when people aren’t always at their best, relationships are put to the test. Many of the connections you’ve made until today may be gone tomorrow—but those who ride out this wave may just last into the next big joy ride to be had.
10. Do something good; Do it free. Even the Wall Street Journal admits: The economy is on life support, there is no doubt. But as bad as you’re doing, there are many people who are doing worse. These are fellow CEOs with less experience than you, international entrepreneurs far away from home, students, qualified people who lost their jobs—etc. Figure out who you can help the most and do it. Invite them to coffee (yes, you pay) and chat. Besides making a difference in someone’s life, it’ll give you an opportunity to see just how much you have.
Startup entrepreneurs are known for their relentless spirit and guts. They will stop at nothing to breathe life into their ideas. As an entrepreneur you’ve heard the words “it cannot be done” and “no” many times and yet you’re still here. You’ve tested boundaries and bent the rules. It’s time to do it again: Put your startup hat back on and treat your own business as one. Get creative, do things differently, go beyond the recipe book. Make sure your revenue model and strategy are solid, cut deep and efficiently, treat people well, and above all—plan for each and every scenario on paper, in your head, and as part of your vision. Make it your state of mind. Don’t leave any creative stone unturned. Your chances of being here when the economic hairball is finally untangled will be much greater and you’ll be able to quickly ramp up having planned for it already.
When you think in term of possibilities, the economic mess is not so messy. As a matter of fact it's a blessing.
Where have all these great ideas been?
I'm a Life Coach and I appreciate your great input.
Allan Kenyon
www.KenyonCoaching.com
Posted by: Allan Kenyon | March 15, 2009 at 07:46 PM
A nice blog.
I've made it a practice to tithe my waking hours (I started this in grad school). 11 hours a week goes to folks who might use help and the projects of friends. If I have extra time I use it to read. My goal is to be poorly read.
This has resulted in an amazing amount of serendipity over the years.
Posted by: steve | May 15, 2009 at 07:21 PM