Two Paths to Growth: Mend Your Nets or Rev Your Engine
These past several weeks have carried with them an air of uncertainty that hasn’t been felt in nearly a decade. After four strong years of market growth, plentiful capital, and a massive surge in startups and other new ventures, we are now faced with a time that while not unfamiliar, is uncomfortable and came in a fashion that few could have predicted. It’s unlike financial uncertainties of our recent past where the truly savvy could see the writing on the wall—junk securities being sold, incredibly overleveraged home-buyers, increasing liquidity risks with banks, etc. This time, factors stemming from outside of our industry created this new environment. It’s scary, but also empowering to know that there are viable options. We can look to the past for models for the future, and while many companies are struggling today, many are also thriving. As NY Governor Andrew Cuomo said in a state briefing just a couple weeks ago, “You either cry or you laugh. I choose to laugh”. In this market, you can be a pessimist or an optimist—let’s choose to be optimists, while not losing sight of what’s real.
Let’s get to it.
I stumbled upon two tweets that haven’t left me since I read them. They’ve spurred a lot of thinking about the paths forward we have as operators in this new environment. However, these paths will not fit all businesses, so let me be very clear now who these paths are not for:
- Businesses with limited runway or catalyzed cashflow problems
- Businesses that do not have a healthy amount of future accruing revenue
- Businesses whose models generally do not work well in a digitized world.
Now, that’s a lot of our economy right now, but there are businesses that these paths are for:
- Technology companies (especially SaaS)
- Service companies that can pivot to provide the same levels of quality and service digitally
- Businesses that have built up a strong war chest to tackle times like this
If you’re any of the above, these two paths will likely work for you.
Path 1: Repair your nets.
Too often during the pace of regular business we encounter fundamental problems and identify the right solutions, but can’t solve them immediately. It’s frustrating, as we know what’s not working, or what can work better, and we know how to solve it, but time and competing priorities are a challenge. While most things are performing well, maintenance projects shift down the priority queue until they reach the bottom of our lists. In times of growth, that’s generally fine—if you can forego maintenance to drive accelerated growth, do it! Don’t take down the sails as the wind grows at your back, lift them higher. But, when the seas get exceedingly choppy and the boats can’t make it out of port, it’s time to revisit these maintenance initiatives. The goal is not just to stay busy. It’s to stay busy doing work that will have a real, albeit deferred, impact on the business. It’s time to repair the nets and spend the time you can’t be sailing to ensure that when you go out again next, your yield is materially higher.
So, what are the nets?
1. Technology Stacks: Ensure that your tech stacks are in order and can be viewed on a single page. At the Ricciardi Group, we call this the “One Page Tech Stack”. It is critical, no matter your role, to understand all the systems in play and how they integrate with one another. Technology is a part of everything we do, and as modern marketers and business operators technology is not “for the tech people” anymore – it’s every person’s business and is critical in not only contextualizing problems but also in streamlining processes and creating value.
2. Technical Web Audits: Technical web audits are not fun and they’re certainly not sexy, but they can mean the difference between meeting and exceeding demand goals and falling short. Technical web audits are critical maintenance initiatives because they lay the foundations for future success with content optimization and SEM efforts, enabling you to remove key, invisible barriers. But these audits and the action items that come out of them are often time-consuming, detail-oriented, and require cross-functional support. When teams aren’t pressed to push forward with urgent new business initiatives, it’s the perfect time to dig deep into technical web audits.
3. Business Continuity and Disaster Recovery (non-critical) Reviews: Your business should always always always (did I mention always?) have a robust Business Continuity Plan (“BCP”) and Disaster Recovery Plan (“DRP”) in place as a normal part of doing business. But in the wake of a crisis or particularly transformative period of time, you should take the opportunity to review your BCP and DRP in the context of the latest situation. How effective did your planning prove to be? Where did you run into issues? Are those issues unavoidable, or are there learnings that you can take away and incorporate for the future? Your business continuity and disaster recovery planning should always be getting better, and there is no better time than after a real-world test to reflect, review, and improve.
4. Budget Reviews: During the pace of regular business, we often have very little time to review our budgets and spending in-depth as we’re focused on what we have left to accomplish and how much capital we have left to get it done. When business slows down, there is no better time than to review budgets in detail. That means not just assessing budget categories, spend to date, remaining budget, rough mapping of where money is going to be spent, etc. but actually doing the hard work of analyzing and assessing spend efficiency, efficacy, and making calls on whether your current plan and budget structuring is really working. Be hard on yourself – be critical of every dollar spent and think about the ways those dollars could have been better spent with the benefit of hindsight. Where did you make poor spending decisions? Was there any way you could have seen that in the moment, or was it impossible to identify? If the budget were to be cut by 50%, what would you keep and what could you do without? What percentage of your budget is not directly servicing performance KPIs? Think deeply on this and spend time with your budget, document your thinking and decision making, and then adjust your budgets as needed.
5. People-Focus: As managers, operators, heads of departments, heads of families (in our personal lives) we always try to put a focus on taking care of our people. But when things are busy and going well, we often end up checking the box on physiological needs so we can proceed with our busy schedules, rather than taking the time to focus further up the chain of personal fulfillment. Referring to Maslow’s Hierarchy of Needs, we cannot forget that there is so much more to the person than just food, water, shelter, and income – our people also need love and belonging, esteem, and self-actualization. We can’t always solve all of these in a professional capacity, but when we have the opportunity it’s our duty to try to address, nurture, and encourage the fulfillment of these higher value needs. Spend the time to think deeply on how for each person you’re responsible for, you’ve helped foster a sense of belonging, have nurtured esteem, and have helped enable the journey toward self-actualization. What have you done, what more can you do, what simply will never be able to be solved by you? Make a plan and talk openly with your people about these needs – ask for their opinion, ask for what they need? Our greatest asset will always be our people, so take care of that asset.
Path 2: Drop down a gear and mash the accelerator.
While the above quotation can’t be verified by a source, I love this insight from the late, great Ayrton Senna, an automotive racing legend. Too often, companies are stuck fighting neck and neck, pushing each other further in hopes that one will gain a clear advantage. Although this environment ultimately creates benefits for consumers through competition, it makes it difficult to establish a clear market leader. It’s hard for a sole company to break out and gain a material lead, to keep distancing from the pack when the conditions are strong for all. In sunny weather, it’s easy for us to compete hard and push ourselves far. However, when the rain comes we find that the money dries up, panicked investors expect faster returns, and it becomes increasingly difficult to do what we are best at. That is when teams are able to really show what they’re made of. The best teams will find opportunities. They’ll work harder, faster, and smarter and create an advantage out of a storm. They will be the team that passes in the rain, that optimizes for the weather and takes the lead.
So how can our own businesses take the lead?
1. Understand the field: We often understand our competitors intimately during good times. We know where they are strong, where they are weak, where they pull ahead of us, and where they lag behind. But differing conditions create differing performance. It’s important to reassess competitors and understand how they perform when conditions are non-ideal. Are there new exposures? Have new strengths emerged? How does that compare with our own differing performance in these conditions? Changing market dynamics can drastically affect positioning–make sure you know how your competitors have been affected so you can maneuver your own positioning to the areas of greatest impact in a changing field.
2. Fail fast: Your company may be so young that you’ve never encountered a market downturn before, and that’s OK. You might not have past experiences to draw inferences from to predict future performance, but you can be fast and smart. Move fast and fail fast. Experiment constantly (but strategically) to understand what’s not working so you can rule it out and reinvest in new strategies and tactics. It’s OK to fail and to fail a lot, you just need to get to those inevitable failures fast so instead of bleeding out, you’re patching quick nicks and forging on stronger and faster than before. Initiatives that used to take months of planning don’t have that luxury of time anymore, so find a test with statistical significance and run it fast. If it works, double-down and keep moving forward. If it doesn’t, move on to the next. If you don’t know what an A/B/C/D, etc. test is, read up on it quickly and start employing them in everything you do.
3. It’s OK to seize opportunity, it’s NOT OK to be opportunistic: I know you’ve seen it because I’ve seen it 1,000 times over now….self-proclaimed thought leaders telling us not to market or sell in this environment, preaching that too many people are suffering and to sell is to be tone-deaf. They’re right, but only in one way only–the world is suffering right now. People are hurting, global health care systems are being stretched further than anyone could imagine, and people we care about are dying. We cannot ignore this suffering, we cannot ignore this loss, and we will not. We also cannot forget that people without health symptoms are suffering now too. They’re suffering economically and psychologically. They’re wondering how they and their families are going to make it through the next few months with no job, no health care, and with a market that is quickly diving into potential recession. To not market our businesses, to not sell when we’re able to is a great disservice to the people that have leaned in to make our businesses possible and to our communities at large who need our financial system to continue to function so they can get back to work as soon as possible.
To not seize opportunity is to not be in business. Our businesses are born out of market opportunity. If the current market provides opportunity, don’t feel guilty seizing it. Trust me, you’ll feel far more guilty laying off part of your staff because you were afraid of some ruffled feathers on social media. But don’t forget that in seizing opportunity you must also be authentic and stay true to your core values. There is a fine line between taking advantage of opportunity and being predatory–make sure you understand the line and know that you are always keeping all toes on the right side.
Here are some quick, non-exhaustive, do NOTs:
- Do not change your messaging to take advantage of the sick. In no way is it appropriate to take advantage of someone when they are fragile and/or ill. If your messaging was crafted for someone that is sick and does not provide them with outsized value, then scrap that messaging altogether and put it in a trash bin where it will never see the light of day again.
- Do not play into fear. We’re all scared, fear must not be a driver for urgency. It’s okay to highlight new and emerging challenges that you’re able to provide real value in overcoming, but remember your job is to be an agent of change for the better, not an agent of fear.
4. Do things that don’t scale: When growing rapidly, we obsess over how we can make every aspect of our businesses scalable–how can we templatize that, how can we ensure there are greater efficiencies in the future, can that be effectively automated? Having a scale-first mindset is great, but when times are tough and you’re trying to truly differentiate your business from the rest of the market, you need to be hyper-relevant, specific and nuanced in your messaging. You need to do things that don’t scale. That means taking the time to check in on your customers and see how they’re really doing, having 1:1s with employees or team members you might not normally interact with on a regular basis, diving deep on things that might not be in your “lane” but can provide value to your colleagues and clients, etc. There are so many things that we do not do, but are capable of doing, in the service of efficiency. Reserve time to set that mindset aside, and do the things that don’t scale. You’ll be, and feel, much better for it.
Written by Jay DiPietro
A little about me.
I’m a marketer by training. I spent the first ~3 ½ years of my career at a growth-stage SaaS company running Demand Generation, but wore many different hats. These included partnering with the finance team to help determine product pricing strategies and working hand in hand with the sales team to define the data we needed to identify our best opportunities – always in the serve of positioning us for sustainable growth. Since then, I joined The Ricciardi Group. I started my time here as a digital strategist and quickly transitioned into a more general Client Strategy role. In this new position, I was able to learn the ins and outs of effective storytelling, the keys to positioning, and how companies can (and must) bring themselves up the value chain with incredibly strong strategic messaging and the tactical prowess to execute on those strategies by bringing them to life in the marketplace. I am exceptionally grateful for the breadth and depth this experience afforded me. A year and a half later, I took over Operations for the Agency and have been living day-to-day as the primary operator in partnership with our Managing Partner and Founder. In that time, we have made the Inc 5000 fastest growing private companies list and the Financial Times’ 1000 fastest growing companies list. I forecast new business, help define our sales strategies and service strategies, keep a constant eye on resource allocation and margins, manage our finance teams and grow a single strand of gray hair for each time an invoice doesn’t convert into cash on time, among a hundred other things.
Basically, in six short years I’ve had the opportunity to come full circle. I’ve sat in a marketing cost center, transformed it into a revenue center, worked with some of the greatest qualitative brand strategists in the world, and dove deep into data with some of the most qualified quantitative operations folks in the country. Now, I operate a fast-growing Agency where I see the view from above, but actively participate in efforts on the ground.