I might be calling this a little early, but in times such as these, its better to be early than dead. Now that the Sensex is 30% (Nasdaq 25%) off recent peaks, and US economy heading downwards, here are some lessons from the last time we went through this:
- Cash is king – raise money if you can; dont vacillate on valuations
- Put your blinkers on, and build the business – avoid distractions
- Focus on the customer – build what you can sell in near term
- Building brands can get cheaper – but will still take cash
- Enterprise sales (software or services)? Count on longer sales cycles
- Beware of old receivables – a lot will evaporate
If we do get to a full bust, I will come back with some more. Remember, the great companies of today were built on surviving the last bust. Here’s your chance.
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Jatin, interesting that you too feel this is a good time for M & A.
Good post Alok!
We are a small software services business.
I was wondering why the US enterprise sales cycle is so longer or just vanished in some cases.
Do you think it is time to raise money in software services business?
Deepak ,,,we already dropped few customers/partners and prospective customers just like hot hot potato…..
What timing. We just had the deep heart-to-heart and moved into lean mean survival mode to ride out the bust. Less grandiose plans, faster execution and focus on a specific kind of customer. Very very interesting this is getting. New resolutions for the new times.
I like the fact that I may be able to rent cheaper. I may get employees easier too. I will scout for fire sales of computer equipment, specifically laptops. I will renegotiate where there was no room to negotiate. I will throw out my old excel sheets and replace them with idols of the flying spaghetti monster. I will work on revenue and profit. I will validate the assumption that some people are still interested in making money. I will make money.
This is going to be a tougher bust than the last one because it has a more secular appeal to it. And we are in the stock market business!
It is still a boon in disguise. I would rather have survived it than lived through fighting extremely well financed competitors. This bust gives us a chance, and by jove, we’re taking it.
Good points overall, Alok. One more small point is: If you customer ain’t paying, drop him like a hot potato. I have been hit hard earlier for not doing so.
And someone please tell me that the Indian Online Advertising market isn’t completely flushed down the toilet.
nice tips. guess a lot of companies will be on the block now.
Good to hear from you.
I think “Time is the King” as the wise money belongs to it.
Going by the wisdom of crowd “cash is the king/queen etc”
This can be the year of mergers & accquisitions