Yesterday, as the Dow Jones Industrial Average dropped below 7,000, I took a deep breath and wondered “is America caught in an endless downward economic spiral?” It was a dark thought. And a brief thought. And you’ll never believe what lifted my spirits.
While channel surfing (on traditional cable TV…) last night, I stumbled onto “Apollo 13″ — one of my favorite movies. But more importantly, it’s one of my favorite stories about focused innovators overcoming extremely long odds.
Imagine being in space — 200,000 miles (322,000 kilometers) from earth — and your ship is bleeding to death as it speeds toward the moon. Even if you could turn the ship around, all of your indicators show you won’t have enough resources — fuel, oxygen and computing power — to make it all the way home.
President Nixon, We Need Your Help
Now, imagine if NASA Flight Director Gene Kranz (pictured) had dialed President Nixon and Congress for advice on how to save the Apollo 13 crew. And imagine if NASA started handing out large bonuses to staff for hard work during an incomplete mission where lives hung in the balance.
As I watched the movie unfold, it put our everyday economic challenges in perspective. Throwing money at problems often isn’t the solution. True innovation — from large, nimble companies and small, hungry start-ups — will pull the US and other countries out of this economic mess. Led by innovators, the turnaround is coming. I just wish I knew when.
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We need to continue trying to embrace the future, however difficult, and not hide in the past. The last election was in part about getting our heads out of the 1950s and looking around ourselves.
For too long the assumption was that the World becomes like America over time has ruled. The reality is that we all become more similar and America becomes a more equitable participant in the World economy. We can’t assume we will have bank loans, credit and mortgages and that inflows will pay for it, while Asia saves. Money now flows to growth opportunities globally and financing US growth through private debt rather than competitive businesses is no longer sustainable. Unfortunately we are having to substitute state debt to cushion the fall and moderate unemployment but the reality is we need to take this fall at a rapid pace and make sure our cost structure competes with Asia and that we are providing comparable growth opportunities.
Nostalgia will not get us there.
Owen: I tend to be nostalgic even as I look ahead. Good to meet you at the Mashable event last week, and welcome to MSPmentor.
Joe,
Nostalgia aside, I think your point about “True Innovation” is right on the ball. Considering all the excesses in the US economy driven by foreign debt in the last decade or so and considering all the excesses in the form of bailouts after bailouts, the only way for the US to come out of this crisis intact and as strong as ever is through some breakthrough inventions or innovations. One should not forget US achieved its status as a superpower through this process of innovation in the last century.
These innovations have to come from some field which will fundamentally improve human productivity by leaps and bounds. If US fails to deliver on this front in the next decade or so, then it is inevitable that the next generation of Americans will pay a heavy price for the excesses of this generation.
It is worth remembering the fundamental law of economics that “there is no such thing as a free lunch”.
Sekar
Sekar,
I remember feeling somewhat helpless during the dot-com implosion. I worked for a big media company and they certainly treated me well.
But as an editor in a big media company , there was only so much I could do to control my fate — I didn’t “own” the business nor did I have much influence in sales strategies. And I wasn’t really “innovating…” — I was just delivering content for readers.
I didn’t pay enough attention to the Internet because I fell in love with my existing career (producing magazines). My magazine wound up shutting down. A career setback? Short-term, yes. But it forced me to look beyond the shrinking magazine business to develop new skills.
And it forced me to realize that I have to constantly innovate, and perhaps even cannibalize my own products/services — before somebody else does. As Intel’s Andy Grove put it, “only the paranoid survive.”
I’m as paranoid as ever.
Joe,
I think I can relate to your story lot better than most entrepreneurs. Some of us have to be pushed against the wall to deliver our best. I have no problem in saying that I am very much in the same boat.
I want to clarify something about my previous comment so that there is no scope for misinterpretation. When I said US has to deliver on some breakthrough innovation, I actually mean that such innovations have to come from individual initiatives from people like us – who are pushed against the wall. I did not mean that it has to come from some centralized government initiative through some mega-government planning. I thought it is important to clarify this as these days lots of very smart people have started thinking as if the government has to do something.
If at all some true innovation happens because of a government initiative it will be more of an accident. True innovations happen through the efforts of millions of individuals – who innovate either in order to survive or because of some innate human curiosity. All that the government has to do is to step out of way and make sure these individuals have the fullest freedom to pursue their dreams and also not interfere in the way these true innovators are rewarded for their efforts.
Sekar.
Sekar: We’re on the same page. Instead of waiting for government dollars, we’re marching forward here at Nine Lives Media Inc. (MSPmentor’s parent).
We’re students of IT media history:
- Ziff Davis launched in 1927 and survived the great depression.
- CMP Media launched in 1971 during a major recession.
- CNet launched in 1992, while the US was still struggling to emerge from a recession.
With those examples in mind, we intend to keep growing (responsibly) — regardless of the recession. I can’t stomach failure. I can never sit still. And I’ll never wait for a handout from the government.
If the recession somehow destroyed Nine Lives Media Inc., I’d be crushed. But I’d heal. And I’d sit down with Amy Katz (my business partner) to figure out what we should launch next.
Hi Joe,
What’s truly a shame is how many good businesses run by honest and hard working people have been affected by the errors and outright fraudulent actions of others. Even here in Nebraska, where we’ve been somewhat isolated compared to most places, we’re feeling the fallout. How have we responded? By adding staff and developing new products. We’ve added another developer and QA engineer, as well as a new Implementation Coordinator focused on making our customers successful. It’s VERY difficult to make decision such as adding bodies when everything you read – every day – tells you the country is dissolving before your eyes.
As a business owner, you need to take a hard look at your business – not just the failing businesses of others. Chances are you have not made the same horrible mistakes as the business you see in the news. How is your financial situation? Your cash cushion? The disposition of your customer base? Is it time to lay-off or, however unlikely it may seem, grow? Entrepreneurs that look past the hardships being faced on a global scale and make good decisions based on their specific situations, vertical forces, and cash flow, will be the ones that emerge from this mess stronger than their competitors.
For example, we’ve always listened to our customers – and I hope everyone here does as well. However, now is the time to redouble those efforts. In our case, that means regular Customer Advisory Group meetings with dozens of key customers to ensure that we’re working on the right features and new products AND completing them in the right order. It’s tempting to think that you KNOW what your customers want, but if you’re not asking them – and asking enough of them – you probably don’t truly understand their needs. There are companies that still need products and services, and they will buy SOMETHING from SOMEONE. If your business is local, offer a free lunch meeting and get a dozen or two of your key clients to tell you what they need, and then focus your efforts on filling the common denominators in innovative ways. A smart man once told me “find what they want, and then sell it to them”. It’s simplistic advice, but an absolute truism at the same time. At Tigerpaw, we’re certainly more cautious about where we spend our money and what shows we choose to participate in, but at the same time we are increasing expenditures on research and product development and adding very real value in free service packs to help our customers weather the storm. Our last three major “point revisions”, which were free to all of our customers under our Total Care umbrella, could have been rolled into one major upgrade that we could have sold, but we made the decision to put customers over dollars in this case (time will tell if this was smart or not, but it certainly helped our customers). Considering our customers own their software and do not rent it, this was of HUGE value to them.
While the economy and political climate are the storm tossing us all about on the same sea, we are all the captains of our own ships. How each of us responds to the storm will determine our fate. Be smart, find out what your customers truly need, and innovate in those areas and you’ll greatly increase your chance of being around when the waters settle.
James Foxall
Tigerpaw Software
James: Thanks for some great pieces of advice. I particularly liked this line from you:
“It’s VERY difficult to make decision such as adding bodies when everything you read – every day – tells you the country is dissolving before your eyes.”
I completely agree. Nine Lives Media Inc. (MSPmentor’s parent) has grown from two co-founders to 10 team members in a year. We work very hard to make sure we’re adding the right talent but also not growing our talent pool too fast. It’s a stressful balancing act.
But there’s also a trade-off: Scaling our business means finding the right people to continue our efforts. We can’t clone our CEO. We can’t clone our initial editorial team members. So to grow, we do need to keep finding the best talent available — and then take calculated risks in terms of assigning new budget to our talent pool.
I’d say scaling the business, responsibly, is the number one thing that keeps me up at night. If you’re not growing, you’re dying.
Best
-jp
Hi Joe,
I know exactly how you feel! I don’t know about your experience, but the talent that I’ve had to choose from the last few months is far stronger than it was a year ago. One side effect of the rising unemployment rate is that there are quality people out there. I found it very difficult to get the caliber of candidates I desired in the past.
If you’re looking to grow, now is a good time to be searching for talent.
James Foxall
Tigerpaw Software
James: Yes indeed. The pool of Web 2.0 media talent is incredible right now, and many traditional media companies don’t know how to find and engage them…