This article from Mark Friedler is worth a read if you are an entrepreneur. Truer words have never been stated and they provide a pathway for surviving in a recessionary economy. Read on!!
How to Adapt to a Changing Business Climate - and Come Out a Winner
Guest editorial by Mark Friedler
It’s no secret that times are tough and the economy’s problems are impacting many industries. We have been blessed to be part of the high growth games industry and specifically the online games industry that has seen explosive growth. But if things are so good in our industry, why are studios closing, publishers losing money and people getting laid off? What can you do to make sure your company makes it? The climate has changed, things are tougher and now more than ever there are opportunities for you to win big.
Its tough out there and you can do it. Here are some reflections on the changing business climate and a few ideas and steps you can implement at your company today to help you succeed.
1. Accept the Current Situation. If you're fearful, admit it. How long will your cash last? If you're not sure, find out today. Don’t get caught in the headlights. Now is the time to come up with a plan that leads you to the top. Just because we get paid to make games and have fun doesn’t make us recession proof. Like any business, we need to create great products and experiences for our customers.
2. Get Focused – What does your business do better than anyone else? What differentiates you and why will you win? Huddle with your team so you're all on the same page. Set very clear goals for your business and measure your progress weekly.
3. Do the Math – Look at your finances. Do you need more funding, how much, when and why? Are you profitable and if not, when? Times are tough and venture capitalists won't fund anything just because it’s an online game, tool or virtual worlds. They will ask you to do more with less. Get ahead of them - you must have a focused value proposition and clear plan to make money. Your cash flow statement is your bible, review it weekly.
4. Eliminate “Nice to Have” Stuff – A company I was talking with at CES told me of their 3 great interconnected services to help improve online gamers’ experiences yet only 1 of these made money. They had just done a VC raise and the other services were draining cash. Did they really need the other 2 for the first to succeed? No, but the CEO loved the idea of all 3 things together. To win you first need to survive. Cut anything you can't afford or is losing money.
5. Build your Dream Team Now – There’s lots of great talent available out there. If your business is on a winning track, find some A-list people to hire (full time or as consultants) today. Show them loyalty and commitment and you'll be handsomely rewarded. Be honest with your existing team and be clear on your goals and what needs to be achieved. Great people will rise to the occasion, weak people drop out.
6. Get Some Help – Talk to your board, advisors, VCs, competitors, colleagues. Tap into your community’s knowledge base. Many people have been there before and can help. Ask your team for input. Take some quiet time to work “on your business” instead of “in your business” where it’s non-stop fire drills. Consider a mentor or a coach.
7. Love Your Customers! If you're a B2B company, ask your clients what you can do to help them. Come up with an idea to help them improve their business results. Solutions will get you more business. If you're a consumer company, pay close attention to what they are doing in your game. Competition is brutal – a recent article found more than 200 online kids’ games alone were now in some phase of development. If your product is great and you show users the love, they will love back twice as much. Give them an opportunity to be your “story teller” through social networks, referral programs and increased visibility and status.
8. Get Strong – Look at opportunities to grow with investments, acquisitions and mergers. Prices have come down and there are deals for the leaders with bold vision. One of my clients has been successful adding to their development efforts by acquiring several small, talented teams who were startups but realized they wanted focus on their work, not trying to build a company.
9. Make Some Noise! – Some companies choose to reduce their marketing and ad budgets. There are several opportunities for you to get noticed in this market with smart advertising, marketing and PR. Here are a few ideas: http://bx.businessweek.com/advertising-in-a-recession/
10. Don’t Forget What's Really Important, Have Some Fun! – Give yourself and your team time to relax and have fun. Get exercise, try to eat better make quality time with your loved ones. Though this may sound counter-intuitive, these things will help you stay calm, focused and powered up.
In conclusion, sure the climate has changed. That gives us more opportunities to be creative. We'll need to be better, faster and more valuable to our customers. We are part of an innovative fun industry with unlimited growth potential. If we stay focused on our passion and think about why we love inventing new things, pushing the envelope and creating new ways to entertain the world we can deal even with the biggest challenges. That passion combined with a realistic plan should help us weather the new climate and position ourselves to level up to meet the coming challenges.
Mark has founded and sold 3 companies including VCast (to Verizon Wireless), GameDaily (to AOL) and Sweden’s first chain of cookie stores. He is a partner in Worlds and Games LLC and is coaching CEOs and top executives on growing successful businesses. He is a frequently invited speaker and panelist on entertainment, games and business topics at industry events including AdTech, OMMA, CES, E3, IMedia, Digital Hollywood, Digital Media Wire, EMA, MI6, Tech Council of So Cal, Game Supply Academy and other events. He lives with his wife and 2 boys in the Bay Area and can be reached at firstname.lastname@example.org