With all the talk about whether the bailout packages coming out of DC are going to fix things or not, I hear very little discussion of what corporations are doing to help besides sloughing off staff. Don’t corporations, those that aren’t on the verge of bankruptcy anyway, have a responsibility to be a part of the solution? Certainly there’s a responsibility to shareholders to maximize the value of the corporation but isn’t simply cutting costs, shutting down factories and waiting for the government to make it all better a cop out?
In a sense, layoffs create more layoffs. A technology company lays off people who stop shopping for new clothes from a company that no longer needs as many retail workers who get layed off so they don’t drink as many lattes from a company that doesn’t need as many baristas and so on and so on. Full disclosure — my first reaction to the economic turmoil was to trim my staff of anyone that wasn’t absolutely a critical contributor. However, coupled with that immediate reduction in expenses was a reexamination of our strategy. Our plan WAS to build a business the old fashion way — buy traffic on a cheap CPA and maximize the LTV of those customers for maximum profitability. Would it have worked? No doubt, had the funding been available to buy that traffic. But as it stands we had to find another way. Now we’ve built a massive distribution channel through partnerships that will ultimately build us a bigger business faster than we could have done it “the old fashioned way.”
Maybe everyone is doing this to some extent, but for the most part all I hear about are the cost reductions. I don’t hear about the creative ways people are reinventing their businesses to adapt and thrive. If a startup like FlowPlay that’s barely started making revenue can figure out a way, big companies should be able to try new things to grow their business instead of just downsizing. If we all just give in to the gloom it becomes a self-fulling prophecy.
