Cry havoc and let slip the dogs of economic nastiness…
I’m gonna want your opinion here in a minute.
But first, I have a very relevant question for you: Has the looming recession got you scared yet?
The mainstream media sure hopes so. Sells more newspapers, boosts cable ratings on CNN and Fox and MSNBC, makes the populace hyper-aware (like jittery squirrels gathering nuts in a dog park), and gives advertisers a tidy little narrative to help position product.
An audience with frayed nerves is an audience paying attention.
They like that.
Entrepreneurs and small biz owners can be especially vulnerable to economic downturns.
Or even talk of an economic downturn.
Frequent news stories about financial doom tend to bring on the “Yikes, we’re all gonna die!” response. Even in people who should know better.
My pal Perry Marshall reminded me of the “should know better” part today, when he sent out a blog-alert email titled “My rant about this so-called recession”. Damn good rant, too.
Basically, he noticed that his list seemed to self-select themselves into two distinct categories: (1) The whiny 95%, who seem to almost welcome economic disaster (as definitive relief from the anxiety of waiting for the hammer, so they can blame any pending failure on “outside circumstances”)… and (2) the “Alpha Warriors”, who barely acknowledge anything the mainstream media say about the economy.
Perry thought the Alpha Warrior segment of his list hovered around 5%. After I called him (to congratulate him on an insightful post), we both immediately agreed that it’s really probably closer to 1%.
In other words, in a room of 100 people, the folks ready to latch onto recession fears as an excuse to crawl into a fetal position and suck their thumb would dominate the discussion, the physical space, and the mindset.
There would be one lone dude, in the corner, ignoring them and getting on with business.
This is an important observation.
The narrative of your world-view can deeply affect how you act.
I hear from entrepreneurs all the time who were shocked, saddened, and even discouraged by the cacophony of negative voices around them when they decided to try their hand at marketing. If the opinion of your family, friends, co-workers and even future colleagues matters to you… just skip starting your own biz.
Cuz you will rarely hear an encouraging word. Most folks don’t like change, and resent the turbulence you cause by ignoring obstacles and overcoming problems to go after a goal.
Consider how many people around you base their world-view on the idea that “you can’t fight city hall”, or “The Man controls everything”, or “The little guy doesn’t stand a chance”. No dream of independence or getting rich can survive that kind of negativity. If they HAD a dream, it’s gone now.
And you’re kind of throwing that sad fact back in their face by going after your dream.
Not everyone is like that. But do not be shocked when you hear about even close friends secretly rooting for your collapse, or taking delight in the struggles you encounter. If you fail, they are proven right — you never really stood a chance. What a fool you were for even trying.
Worse, if you succeed, you very likely will drift away from the slacker world they are so comfy residing in. You’ll force them to come up with new excuses for their own lack of movement.
And that’s a horrible thing to do to friends. You naughty person, you.
The media loves a recession, because it means no slow news days for a while. Every utterance from the Fed is a headline, weekly columns write themselves (just pick two recession cliches from your cliche file and rub ’em together), and “man in the street” interviews will always yield some nice emotional sound bites.
Great marketers see a recession as something else: An economic burp that may or may not affect them. If it does, then you adjust accordingly. If it doesn’t, then it’s full speed ahead.
No hand-wringing allowed.
As Perry pointed out, it’s now a global market, dude. The dollar’s fade is the euro’s goose (and, if you’re exporting, the best news you could ever hear). Maslow’s Hierarchy of Needs doesn’t vanish just because the Gross Domestic Product does a prat fall.
People still need to eat, still need a roof over their heads, still demand luxury.
And still need advice. Maybe more than ever.
Many will need new jobs. A recession isn’t fun by any means, and neither is it a joke.
However, neither is it an excuse to fold up shop and go hide.
I happen to know the number one real estate broker in town here. The Reno market went from being one of the top five hottest housing booms just a year or so ago… to becoming one of the worst in the nation. Prices, values and capital are plummeting.
Yet, people still need houses. They move away, or move here from somewhere else. Or move up, or down, as the nest requires more or less space. Many still see the cheap loans (as the Fed lowers rates to almost ridiculous levels) and distressed sales available as excellent reasons to buy or sell, or both.
Sure, the easy days of the boom are gone. Have a good cry, wipe your nose, and get back to the job at hand. Adjust your strategy to meet the challenge.
This guy was the top realtor during the boom, and he’s the top realtor now that the market has lapsed into a fever. He just adjusted.
It’s the same with every other market I have hooks in. The smart guys note the nuances of how things have changed, and redirect their energies to what works NOW.
The not-so-smart guys shriek and lose sleep and curse cruel Fate. And pine for the good old days, when their limited bag of tactics was effective.
There’s a saying in the financial world: Never confuse genius with a bull market.
That concept holds for everything else, too. I remember an obscure comedy show where Gilbert Gottfried (the shrimpy little guy with the scrunched-up face) asked a couple of buffed-out GQ male models for tips on picking up women. Their first piece of advice: Never acknowledge a woman the first time she approaches you and begs for your attention. Just keep talking to all the women who come up to you and…
“Wait a minute,” yells Gottfried. “I’ve never had a woman approach me in my life.”
The two studs looked baffled. And had no further advice.
Dan Kennedy and I have often joked with each other about what will happen to the youngest part of the online entrepreneurial world the first time the economy has a fit. There are gazillionaires out there (Mark Cuban comes to mind) who barely sweated earning their mint, because they stumbled blindly into virgin groves of low-hanging fruit, and gorged without effort or competition (sometimes for years).
Taking advice from them would be like asking a Vanderbilt how to cook a steak. (“Just ring for the downstairs maid”, of course.)
Take it from a guy who’s weathered multiple recessions, the collapse of entire financial institutions (I was a rookie copywriter writing financial direct mail packages when the S&L crisis lopped an entire arm from the banking community), and the meltdown of more hot markets than I can count (from Pet Rocks to McMansions).
Ignore the doomsayers. Focus on the fundamentals — good product, good value in your offer, good traffic generation, and the dedicated nurturing of your list. If it feels right to downsize (either in your life, by living debt-free, or in your biz, by trimming the fat), then do so. If your old way of doing things isn’t producing the results you need, try something else. Test more diligently. Study your market for pain that needs attention, and attend to it.
I like that term of Perry’s, “Alpha Warriors”.
But in my mind, you’re really just the Adult In The Room when you continue to take care of biz when everyone else is freaking out.
You may be the only adult in the room, too… and you may be trashed for your refusal to panic… but when you know a fresh game is afoot, you gather your resources and engage anyway. To succeed as an entrepreneur, you gotta be your own best friend.
Seems like obvious advice, doesn’t it.
Takes a little courage, a little faith in your skills and ability to face unpredictable obstacles and overcome them, and a lot of M*A*S*H style humor. Because things can get gruesome, and the media will make sure everyone feels the pain from every obscure corner of the economy.
I actually increase my charitable donations during downturns, even when my income may be flat-lining a bit.
Just to remind myself that true success is the ability to make a difference. In your own life, and in the lives of people you share this hunk of wet rock with.
So please don’t panic. Take a deep breath, and know that the media will continue to treat things like an ongoing George Romero “Night Of The Living Dead” sequel.
And I’d really like to know…
What do YOU think about the talk of recession?
Are you doing anything differently? Are you losing sleep?
Any additional advice, either from experience or from a mentor or advisor?
Blogs like this are the “antidote” to the ravings of the mainstream media, you know. If you’ve got insight to living through roller coaster Dow rides and market busts, let’s hear it.
P.S. Over half-way to the 21-day habit challenge finish line.
I’m holding my own. How’re you doing?
"11 Really Stupid Blunders You're Making With Your Biz & Career Right Now."
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If you’re worried about a downturn of 5-10%, or even 20%, you’re in the wrong business, or serving the wrong customers.
Businesses grow when they bring a product or service to market that is wanted and needed, and if they can perform well enough to build Loyalty. A recession simply puts pressure on marginal business models, selling marginal products to marginal customers. Darwin comes to mind.
Adapt or perish. Innovate or die.
Wouldn’t it be a good time to zero in on the populace’s main
fear(s) and give them a product that will allay those fears–at least momentarily? Seems that this might be an opportunity waiting to be exploited.
I agree with Greg’s comments. Adapt or perish.
This looks like a great opportunity to me. Let’s all cry wolf and the sheep will run for cover. More room for me to gain some ground.
Since you’re a games kind of guy, you can probably relate to this. When playing on-line games, who are the ones winning (in my case, call of duty 4 on ps3)? It’s not the ones who hide. It’s the ones running around, shooting only when needed, when they’re going for the kill. Sure, they get hurt more too, but at the end, have the highest score.
When you don’t move, you’re an easy target. And, you don’t get to learn. You just get shot and think: where the hell did that come from?
Same goes for business. No pain, no gain. No movement, no way to gain ground. Not in new markets, not on the competition in a shrinking market.
As for the challenge. I have 5 big crosses on the sheet next to my desk. Late start..but first results already there.
all the best from Belgium,
PS: we’ll be entering the US market for the first time this year. Despite adverse conditions and production in the relatively expensive euro zone., despite selling a luxury product. I am just not the hiding type of guy…
Your advice applies to “recessions” just as much as it does any stressful situation. The only way to keep a clear head is to stay above the fray.
Here’s a quick “proof in the pudding” story:
I focus much of my direct marketing business on the auto dealer industry. Can you imagine a tougher market than SELLING to car salesmen? Talk about a tough audience.
Which makes them ravenous when you strike a nerve.
In recent months, response rates to their direct marketing efforts are plummeting, prospects aren’t converting like they were a year ago, and their showroom traffic is anemic.
So I recently adjusted my value proposition to helping them wring far more sales out of the traffic they ARE getting. I do it for Free, and only charge them if they sell cars from my efforts.
Just signed five new dealers in the last week. 25,000 more to go.
With todays access to info, everything gets magnified about a hundredfold. The ticket is, as you said, trust in yourself. Do your research, put a little logic into the equation, and turn the ‘recession’ into a huge windfall for your endeavors.
Recession’s clear out the guys whose idea of growing a business was to rely on an ability to borrow money, not make it.
That ability to lend is what dries up in a recession. And the guys in the red have to sell all their assets. What’s left is dirt cheap resources the savvy guys with positive cash flow can buy up.
Cheap real estate…cheap computer equipment…cheap offices…cheap factories…cheap capital equipment…cheap big screen TV’s…cheap advertising space.
It’s funny (but not really) when you see just how much of a strangle hold the media has on peoples lives.
People today can’t even tell you if they’re happy or successful without first seeing what the latest FOX News survey has to say about people like them.
I think everyone needs to go on a media detox to cleanse their mind and sooth their frazzled nerves.
Reminds me of the story about the old Greek fella who sold sausages on the corner. Every day rain or shine he was out there selling his sausages and business was good for him.
One day a corporate fellow who bought a sausages from him every day said “Adonis how can you stand out here every day and sell sausages for a living? Are you not worried about the recession?”
“Recession?” asked Adonis. “O yeah” said the young fella businesses cutting back or closing all over the place, definitely a bad time to be in business.”
That night Adonis talked it over with his wife and decided that if the recession was really so bad he had better reduce the amount of sausages that he bought so as not to have so much money tied up in stock.
With fewer sausages to sell Adonis had less money coming in and cut back on his orders even more. Soon his income could no longer support him and his family and he closed down the stand entirely.
After weeks of looking for work Adonis finally got a job in a factory paying him only minimum wage as he was unskilled labor.
That night after supper his wife and he talked about their situation.
“You know” said Adonis, “that young fella really knew what he was talking about when he told me about the recession.”
[…] in the Reno Gazette Journal from the past 10 years, as well as some of her readers?? …www.unr.eduHow To Survive Excessive Recession Hand-Wringing Thursday, 10:03pm Reno, NV Cry havoc and let slip the dogs of economic nastiness?? Howdy, I??m […]