The Leaves are Falling
Posted by Jamie Hutson | Filed under Life, advertising, revenue models
Its October and unfortunately the leaves aren’t the only things falling. As the days get shorter and the weather a bit colder its an interesting time to be thinking about business. I have so much fun running a business, marketing, strategy, different things every day - its great. But there are some times when business is not easy, hiring/not hiring, letting people go, dealing with soured relationships, etc - and of course its never fun to see the sky falling all around you.
This time around (referring to the recurring October market crashes), I have a stake in whats happening. I didn’t know what the stock market was in ‘87 and I was too busy crushing life in 2000-2001 to really see the affects of that downturn. But now I’m here and I’ve got everything I have in the stake of the economy. I read recently (today) that ad supported businesses are in danger, and hear major VCs telling their portfolio companies to “tighten their belts.” This is laughable, what kind of business model - not website, tech company, ad network - but business model encourages or allows operating with no constraints? Of course companies are going to have to tighten their belts, a third of them are going to close! Look at JP Morgan. Look at your regional banks that only lend money to the best qualified.
Look at whats happening these days, this part isn’t laughable. Lehman, Merrill, and others… people are losing their jobs. Big white collar jobs. And you know what alot of these startups that are competing in the same arena as 12 other startups funded by 12 other $2 Million dollar rounds, how are they all going to survive this economy? Well maybe the economy will be just fine. Maybe the $12 Million dollars we raised last year will get us through 2009? Maybe. (we didn’t raise $12mm, its rhetorical)
My point here is that when people buy houses they can’t afford, when people sell loans they know can’t be repaid, when consumers rack up tens of thousands of dollars of debt buying iPhones, new laptops, expensive jackets and all this - some people think thats the American way. Well thats a shame if it really is, I mean REALLY is. I don’t think thats the American way. Entrepreneurship, new business investments, commerce, advertising (invented/pioneered by Ben Franklin) these are the American way. But even we can go astray -even advertising can! ;).
We make so much of the people who took out loans they couldn’t afford, but Citibank was telling people it was ok - “Live Richly” What about the lenders who backed these loans, and sold them. What about the Bear Sterns Executives who sold their stock at $92 a share in December in January, but told the world (and their employees) all was fine. What about the SEC and the Fed who stood by idly and watched de-regulation and absurd speculation create a pile of fake wealth sitting on top of a very delicate bubble. People were angry at “Wall Street” for creating this mess - what about our government oversight - WHOSE JOB IT IS TO PREVENT OVERREACHING SPECULATION IN THE MARKETS!? What about the administration that deregulated the banking industry in the same way we did 5 years before the Savings and Loan Crisis 20 years ago.
I’m sorry I got off track, but I’ll leave that rant for now… I can’t believe what I’m seeing these days. I can’t believe that a start up, no matter how well funded, needs to be told they should tighten their belts. You’re a start up, starting a new business. This economy is going to be bad. People lost their jobs, they’re losing their homes, and I am losing my mind looking at all these experts who didn’t see this coming. Those who neglect history are destined to repeat it.
I don’t even know how to finish this off because I started out much more benign, but its true, this country has forgotten how it works. We got lazy, we built another bubble, we got greedy, we got rich and then we destroyed everyone else. America is about creation. Creation of jobs, of wealth, of art, of relationships, of lasting businesses. America needs to look in the mirror, because we are awesome, but we need a little check here and unfortunately its going to come too late (if at all).
We need to get back to the real us, the real US. Taking or making an idea better; inventing new products. Not just multiplying some jumbo loans together, and calling it money.
Customer: But why do they put a guarantee on the box?
Tommy: Because they know all they sold ya was a guaranteed piece of shit. That’s all it is, isn’t it? Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I got spare time. But for now, for your customer’s sake, for your daughter’s sake, ya might wanna think about buying a quality product from me.
AIG - didn’t you gaurantee loans?
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