Fred Cohen is the CEO of Zola Suite where he focuses on developing technology that enables law firms to massively scale their operations.
When I launched my second technology company in early 2007, the future was bright. The economy was soaring. We had an innovative platform that we knew would shake up the legal industry, and initial feedback from clients and prospects was very favorable. Fast forward a few months, and that outlook was turned upside down as we headed into the Great Recession.
As we struggled to make ends meet during those early months, some of my closest business advisors recommended that I cut my losses and focus on my legal practice. Despite their warnings, as far as I was concerned, failure wasn’t an option.
As I look around at startups today facing a bleak economic outlook, I intimately feel their worry, their frustrations and their fear. As a founder who came out on the other side of an economic downturn, I want to share some of the tips that helped our company weather the storm and transform into a leader in our industry.
1. Focus on your product or service. When consumers start cutting back on spending, companies often cut back on marketing spend. While it’s tempting to stash these funds, you can establish a real advantage over competitors by reallocating these dollars to product development. Take time to schedule discovery conversations with your current clients to identify any issues with your product or service delivery. When we found our account executives were a bit slower due to a decrease in inbound leads, this was the perfect way to keep them busy while still providing value to the enterprise.
Consumers will buy again, and when they do, you want to make sure you have the best offering in the market and engaged clients who recognize you are committed to their success.
2. Play to your strengths. Small businesses have a major advantage over larger, well-established companies in that they don’t operate in siloed teams. During times of crisis, innovative teams come out ahead.
Create opportunities that foster collaboration and encourage conversations with team members who might not usually interact — for example, finance and product or client support and marketing. It’s amazing the brainpower you’re probably not leveraging within your organization; unlock that potential during slower times.
Playing to strengths for me also means that you focus on delivering services in which you excel. For example, a few of our competitors were heavily promoting their video marketing services. At that time, this wasn’t an area in which we had special competency or experience. As a business owner, it’s very tempting to go toe to toe with competitors — almost for its own sake versus whether or not that’s something the consumer actually demands. Don’t take the bait — especially when resources are limited.
3. Don’t throw people at problems. I am a firm believer that even in the most prosperous times when headcount is abundant, it’s important that you don’t throw people at problems, but rather correct fundamental issues that may be stalling your growth. Start by auditing your current processes and the role of each team member so you can appropriately identify deficiencies and areas of improvement. Focusing on solutions, rather than hires, is even more important in times of economic downturn when new employees can add greater stress to an already strained budget.
4. Remain the eternal optimist. When people ask me how we thrived in those uncertain times, I often reply, “With deep conviction and a lot of hard work.” If you truly believe in your product and company, optimism should spring eternal. It’s this belief that will help you ignore the warnings of naysayers and help you keep pushing ahead when all odds are against you.
Navigating the rough months ahead won’t be easy. Heck, launching a startup in a thriving economy isn’t easy. But as the old saying goes, “A smooth sea never made a skilled sailor.” When you come out on the other side, you will be better off because of the challenges you’re facing today, and in years to come, you may just find yourself sharing words of wisdom with the next generation of budding tech entrepreneurs.
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