Okay, I get it, we’re in a downturn. A recession or whatever you want to call it. Fine.
The question is what do you do to ensure long term success during a down turn? Our office had an interesting professor from IMD visit us and talk to us about macroeconomic trends and behaviour, basically addressing this very question a couple of weeks ago.
The answer, he said and I believe, is strengthen market share. Spend and deliver. I love what Adobe and Cisco are doing, buying up companies that offer complimentary services. I also love what Google’s doing with their Gone Google campaign (check out the twitter search for #gonegoogle), highlighting companies that are moving to their suite of applications. It’s a downturn, others are looking to cut costs, if you can spend and raise awareness, make people see the value of your offering at this crucial time that’s a pretty savvy move.
What goes up must come down, but the same should work in the reverse in markets. What goes down must come up, and when it comes up you’re in a much better situation then the competitors who’ve tried to cut costs and save their way through the downturn. It’s happened in the previous recessions and downturns, a lot of the great companies that started or succeeded after a downturn spent or started when things were difficult. One of the best stories in the book Flip is when the author speaks to a friend at Apple and asks how they’ll survive the downturn, the friend’s response, “Obviously, we’re going to innovate our way out of it” that’s the kind of thinking more businesses need right now.
Don’t get me wrong, I understand that spending money during a downturn isn’t easy, but heck spending money anytime isn’t easy, but you have to think beyond the short term and realise that it’s the long term that you’re investing for.
The great thing about spending during a downturn is that you often get a lot for your money. Whether its media which goes unsold and you get for cost or it’s a company that is looking for an exit and is undervaluing itself. Capital goes a long way in a market like this, if you’re wise enough to spend it.
