I wrote this piece on Feb 18, 2001, a couple of days after Nortel’s stock dived, signaling to Canada and the world, that the internet tech bubble had just burst. The fear was palpable, especially in the tech business incubator building where I had my office.
In re-reading this, I see many parallels with the emotions we are living now. What parallels do you see between 2001 and 2008, especially in the reactions of yourself or others around you? Or the media? And what can you do this time to change the outcome for you ?
Ten Thoughts on “Penetrating the Wall of Fear”
Davender Gupta, 18 Feb 2001
There has been a distinct energetic shift in the fast-growth entrepreneurial community over the last eight weeks. The newspaper headlines are not helping things either – witness the meltdown at Nortel last Friday (16 Feb 2001).
A lot of companies are in fear mode now: slashing staff, shrinking expenses, or closing shop altogether, because of “current market realities”. The human price is very high, especially since a lot of companies are making draconian steps without regard to longer term possibilities or their responsibilities to the team that they had so passionately put together when times were “good”.
I also see fundamentally good companies getting discouraged…when they could be doing very well in the current environment with a little support, encouragement and clarity.
These are times that cry out for coaching intervention, to penetrate this wall of fear that is eating away very fast at the potential of these ventures. What can we do as coaches to help in this situation? Is there anything we can do? SHOULD we be doing something?
Here are a few situations I see around me about what’s happening in the tech sector/fast-growth/dot-com (anything that seems to be connected to the Internet Economy) right now, as food for thought on what can be done:
1. Entrepreneurs giving up.
Some entrepreneurs are simply giving up, closing their businesses in one swoop, or disengaging from the day to day process and letting the venture run itself into the ground.
2. Managing for share price instead of revenue/profit
Leaping into panic mode and making wholesale short-term massive layoffs and cutbacks without thinking about the bigger picture. Some restructuring is warranted, given some of the excesses of the past year. However I’m reading story after story of companies slashing production and marketing teams…even though these teams are currently booking revenue.
3. Risk Aversion
Hanging on to the safety net of “cash reserves” and calling it an advantage. In several cases, i’ve seen more focus on keeping the cash reserve intact instead of using it to propel the business forward (“risk-averse”)
4. Business Model/Plan/Direction
Some entrepreneurs are switching their business models 180 degrees, to follow what’s hot (last year was e-commerce, now it’s m-commerce)…still without clearly articulating what their business is about. This creates confusion inside the company as well as with clients.
5. Personal Stress and Integrity Glitches
Stress levels of entrepreneurs are at an all-time high. Many young CEOs (as well as older ones) are trying to keep a public happy-face (“all is well”) while inside they are very worried about their venture. The pressures right now are enormous, because if they tell the truth about what’s
really happening their backers may pull funding.
6. Pump up the adrenaline
Working twice as hard, promising three times as much, speeding up timetables to please investors and markets…and setting themselves up for major failure. I suspect many teams are burning out.
7. Not taking the time to learn the lessons/hear the message
They’re moving from situation to situation without pausing to see the patterns that they are repeating.
8. Buying in to the pessimism
It was interesting to see reactions in Canada to the dotcom downturn and Greenspan’s actions in the US…even though the fundamentals hadn’t changed much up here (until the Valentine’s Day+2 Nortel stock massacre 😉 For several companies there is no reason to panic, their client base is still strong.
9. Fearing to step into the ring
A number of would-be entrepreneurs have great ideas and the passion to carry them out, but are holding back because of the bad press they’re seeing.
10. Confusion among the refugees
A lot of dotcom refugees (laid-off employees) are wondering what happened, and what to do next. Many have never experienced a downturn…they left university in the last couple of years and jumped on the fast-growth rocket. These refugees do not have the life-skills or support systems that they would normally have if they first transitioned from school into a larger company. So there is a tinge of panic and mob reaction (the day Nortel announced its intention to layoff 10000 employees, local Ottawa recruiting firms were swamped with resumes, even though the specific people to be laid off were not yet identified)
As I read this I am reminded of the truth that “this, too will pass”. The current economic situation, though serious, is part of the normal cycle. The important thing to remember is to keep moving forward. For every offer you make, there is someone who values what you have to offer and who is ready to commit! You simply need to find that person and connect with him or her!
Michael Port posted an interesting note on a similar subject on Facebook (see here http://tinyurl.com/5kl4j2 )