Renaud

Step #2 Remember that some business can do well during a recession. What does Cisco, Oracle and Google have in common? They were started in the worse possible economical times. I was inspired when I read an article in Business Week. It talks about how companies have persevered when no one would ever think about investing in these companies. I will not summarize the article but you need to read it. Get your assistant to print out the following link.

What are the lessons learned:

• 1) It makes sense to do research and development counter-cyclically.
• 2) Recessions can be really useful strategic opportunities.
• 3) Everything is cheaper during a downturn, including the cost of labor, materials, and office space.
• 4) There’s less competition, both from incumbents that are trying to put out their own fires and from startups that find it harder to raise money.
• 5) Tough times force entrepreneurs to work on their business models earlier, so they end up reaching profitability more quickly than when money comes cheap. “The companies are tougher because they were tested during a tougher time”.
• 6) In the case of Lotus software - another survivor, the owner said “If a product meets an unmet need, it doesn’t matter if the economy is bad”.

Last message: Even money saving customers need to get your attention; they are trying to survive too!