Time to Reflect, Reimagine and Reinvest?
The second business book* I ever read was Richard Branson’s autobiography, Losing My Virginity. It was first published in 1998 and I think I read it the following year after it had been reprinted.
Back in the 1990’s, prior to the tech boom, we didn’t really have famous entrepreneurs. There was Richard Branson, his airline rival and founder of easyJet Stelios Haji-Ioanno, Alan Sugar (pre-The Apprentice) and Bill Gates but, as far as household names go, that was about it. No Steve Jobs, no Mark Zuckerberg, no Elon Musk. Of course they were of this planet, and building companies, but they didn’t have cult-like status’ they gained following the first dot.com boom and subsequent bust of 2000.
*(My first business book was The Troubleshooter 2 by John Harvey-Jones (I didn’t bother with The Troubleshooter 1 as I’d heard the second was the best, like The Godfather II). It was based on his TV series which saw him visit a number of failing businesses around the UK to help turn them around, which I found absolutely fascinating.)
So, as someone who was already onto their third business by 1999, I thought reading Losing My Virginity was an absolute must read. Richard Branson was the entrepreneur that everyone talked about. I was often asked, “So you want to be the next Richard Branson then?”. ‘Nope, I just want to be the next Richard Myers’ I would think to myself, I’ll never have teeth like his.
Reading the book from cover to cover left me feeling incredibly inspired. It was an insight into his personal life, as well as his work life, and the fact that he started off by running a record shop really resonated with me (I started off in the music industry too).
Side-note: I was so inspired that I sent Mr B a letter. Yes, an actual letter, not an email or a DM. I was running an entertainments agency at the time, specialising in providing live music for corporate events, weddings, pubs, parties, university balls etc. I wasn’t content with just being another local agency ‘doing the clubs’ in the North East — I wanted to be a the UK’s number one agency, providing all manner of live entertainment up and down the country, and I wanted to do it all online (back in ’99 this was a challenge because people still had crap internet connections, probably dial-up modems, and audio streaming was rare, never mind video streaming). So, I thought if I could license the Virgin brand and trade as Virgin Entertainment, it would give me a huge advantage over the competition. I can’t remember exactly why the deal didn’t happen but I think it was because I lost interest in running an entertainment agency and my other business at the time, Ethic Internet, was starting to do well.
I still have the book (I keep all my business books as reference points) and I found it again recently during the obligatory lockdown activity ‘getting-rid-of-crap-you-no-longer-need-and-box-it-up-and-take-it-to-the-charity-shop-not-sure-if-charity-shops-are-still-open-I’ll-drive-along-and-see-if-not-I-can-leave-it-in-the-doorway-but-can-I-leave-it-in-the-doorway’ after listening too many podcasts by The Minimalists.
Investing When Others Don’t
There are number of things that I recall from Losing My Virginity — Branson suffering from dyslexia, living on a barge and buying an island — but the one thing that stayed with me was his comments on investing through difficult trading periods.
All companies go through hard times, sometimes caused by internal issues and other times by external forces outside of your control. Those difficult periods can also be short-lived or prolonged depending on the severity of the cause.
A good example of a prolonged period of poor trading conditions is the global recession that followed the global crash of 2008, caused by the sub-prime housing market in the US (if you want to know more about that watch the excellent The Big Short). Companies from all sectors were effected in one way or another by the crash, and some would argue that they are still effected. Hundreds of thousands of businesses shut down and more than a million people lost their jobs, leading to a severe recession in the UK.
The fall in the UK’s GDP was greater than any other since the Great Depression of the 1930s and the UK racked up a debt of £2,205 billion at the end of 2012, including £1,094 billion to bail out the banks.
The crash was the catalyst that changed high street retail forever. Woolworths, Zavvi, MFI, C&A, Borders, Comet, JJB Sports, Blockbuster — just a few of the retail chains that closed their doors in the five years that followed the 2008 crash.
Woolworths, a shop that I would visit most Saturdays in my childhood to buy 7" singles, football stickers and pic n mix, had seen a number of deep recessions in its 100 year history (it had traded through two world wars!) yet it couldn’t quite make it through this one. Mind you, the shop had been shit for many years. As a 13 year old I could see that. I’d already taken my pic n mix business elsewhere. Like many other retail chains, they failed to continuously reimagine and reinvent the company. They were no longer relevant.
With Crisis Comes Opportunity
During these incredibly difficult trading periods most business instinctively start cost-cutting exercises. They ‘consolidate’ which is generally a bullshit word for ‘making people redundant’ and they cut their marketing and advertising budgets.
Among many points Branson made in his book, he asked why is it that marketing budgets are always the first to be cut? Is it because companies see marketing as a luxury and that business will be fine without it? Or is it because many company execs don’t really understand what marketing is?
Either way, with crisis comes opportunity. Branson realised that during periods of economic downturn he could actually continue to invest in his brands while his competitors were pulling back. He did the opposite of what his competitors were doing. He gained a competitive edge and took market share while other airlines, record companies and radio stations were treading water or downsizing.
This part of his autobiography really resonated with me. It seemed incredibly daring and risky but I loved his approach. I have been thinking about it more recently given that we have seen a massive economic downturn over the last 12 months. There is no doubt that trading has become incredibly difficult, even impossible, for many sectors and my heart goes out to those businesses that have had to close and make their people redundant. I’ve been there before and it’s a real kick in the balls for all concerned.
But, there are always opportunities. And if you are resilient, intelligent, creative and hungry, as most entrepreneurs are, you will find a way. My company Transmit Startups has seen many businesses pivot very quickly when the first lockdown came into play. One such business, The Schooner pub in Gateshead, a pub we funded in early 2020, closed its doors as a pub one evening and reopened the next morning as a take-away business. Inspired by Marcus Rashford’s campaign to keep free school meals going during holiday time, they then went on to deliver free meals to any families in Gateshead that needed them. No questions asked.
Using these strange times to your advantage is vital. While your trading may be down, or even non-existent, you still have your creative brain to put to work. As the title of this blog says, now is a good time to reflect, reimagine and reinvest.
Reflect on what you’ve done to date. Is your company performing as well as it should be? What aren’t you happy with (a business owner should never be content as there is always more to be done, improvements to be made)? Do you keep losing contracts to your competitors? Do you actually enjoy running the business? Do you still have the energy and enthusiasm you had when you started?
These are all valid questions, and now is a good time you ask yourself them. And be 100% honest with yourself, otherwise there is no point.
Following that, it’s time to reimagine your business. In an ideal world, if money was no object, how much better would your product be than it is now? Who is your ideal customer? What would your perfect team look like — are there any under-performers or people who just don’t fit?
Many companies build strategies to increase revenue by, say, 10%. Some will achieve that, some will only hit 6%. Instead of asking yourself how you can be 10% better, how about you reimagine your company and work out what you could do as a team to be 10x bigger, or 10x better?
When it comes to reinvesting make sure you invest in the right things. OK, so you’ll never know for certain what the right things are but the more experience you build up the better your judgement becomes. You may decide to invest in growing your team, moving into larger premises, spending more on marketing, investing in better equipment. Things that will help you get one step ahead of the competition when things are ‘back to normal’. It may sound ruthless but in periods of recession there will be more companies going into administration, which creates opportunities for those who remain in business. You can buy cheap stock, plant and machinery, IT and intellectual property, to name but a few. And, if you do so, don’t feel like a vulture circling overhead. That’s business. Half a million UK companies close every year, around 20,000 of them going into liquidation. That’s just how it is.
I’m reluctant to use clichés but, what doesn’t kill you in business will make you stronger. You won’t become successful by reading text books but you may become successful by going for it; viewing the difficult periods as opportunities to reflect, reimagine and reinvest and to test your abilities as an entrepreneur.
A final point. Over the years I have been asked on a number of occasions if it’s a good time to start a business. The answer is there is never a perfect time to start. There will always be a number of reasons why you shouldn’t press ahead with your business idea, and that is largely driven by fear, not external forces. And it’s OK to be fearful. But, to become an entrepreneur, you need to overcome that fear otherwise you’re just another person in a shitty job, day- dreaming about running their own company.
And if you don’t believe that successful companies can be founded during a global recession, take a look at the list of companies below. They’ve done OK so far.
Air BnB, founded in 2008
Groupon, 2008
Uber, 2009
WhatsApp, 2009
Slack, 2009
Square, 2009
Pinterest, 2010
Instagram, 2010
Key Takeaways:
- Read lots of stuff. You can get business ideas and inspiration from the strangest of places.
- Don’t be afraid to contact your business idols. They are just the same as you, only a few steps ahead.
- Stay relevant.
- Pivot if you need to.
- Take this time to reflect, reimagine and reinvest in your business, even when others aren’t. Or particularly when others aren’t!
- Don’t wait for the perfect time to start your company, it doesn’t exist.
Additional Reading:
Read How I Built This by Guy Raz and listen to his excellent podcast How I Built Resilience.
