March 5, 2009
Over the weekend, the Star Tribune had a story about a small business owner who said the dismal economy was forcing him to close up shop after nearly 10 years in business.
The story described how he once had a thriving PR firm of 10 employees, and now, due to the economic downturn, he stands on the brink of losing everything, including his house. I don’t wish that situation on anyone, and I do hope he lands on his feet. But stories like this are part of the problem because they focus on the wrong issue.
Warren Buffet once famously said, “It’s only when the tide goes out that you know who’s swimming naked.” The above business owner’s woes were not caused by the tough economy. He was swimming naked when the tide went out.
Tough economic times test everything you know about managing a business. But I believe it’s not the actions you take when times are tight that determine whether you’ll be caught swimming naked. It’s what you do when times are flush. That’s when you need to be extra vigilant about how well you’re investing your resources and whether you’re well-positioned in the marketplace. A booming economy can mask deep problems and instill a false sense of security. When the bottom falls out, it’s usually too late to make the necessary changes.
My philosophy in operating Fast Horse has always been to invest in the things that matter most, live within our means and keep an eye on the horizon. I’m confident it’s an approach that will help us — or any business, for that matter — get through this recession.
But nobody here is satisfied with mere survival. We intend to emerge from all of this stronger than ever. So while many around us are tapping the brakes, we find ourselves in a position to step on the gas. Part of our advantage is our independence. But the bigger advantage comes from the fact that we’ve spent the past couple years repositioning Fast Horse to compete more effectively in this new digital marketing landscape.
Ours is a talent business, and with an unprecedented number of really strong people in the market right now, we’ve put ourselves in a position to pick up more superstars, especially on the creative and digital sides of the agency. Over the coming months, we’ll also be announcing news of some big bets we’re making in areas where we see significant opportunities for growth. (Watch this space for details.)
Does all if this ensure we won’t find ourselves wearing our birthday suits in receding waters? No. These are unprecedented times for all of us. But I can say with conviction I’ve never been more confident of our ability to serve our clients well, and I’ve never been more excited about our future. That’s not in spite of the economic cliff the aforementioned Oracle of Omaha says we’ve all fallen off.
In some ways, it’s because of it.