Our political system is plainly nuts at the moment. But if we let the hardliners get away with their nonsense, our own businesses will suffer and our entrepreneurs will be starved of capital.
BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN
It used to be known as the Michael Jordan rule. When asked why
he was reluctant to discuss any of the politics or other social issues of his
time, MJ famously answered that "Republicans buy sneakers, too." That
was his somewhat subtle shorthand for the now long-abandoned adage that sports
and politics don't mix and that "speaking up" was likely to be bad
for sales.
In my case, it's been suggested occasionally that business
advice and politics don't mix that well either and, as tough as it's been at
times, I've tried to be a good sport and limit my references to, oh, the
crooked Orange Clown. I understand the need to avoid gratuitous gripes and
snarky slams about the cast of crazies in Congress even in such a target-rich
environment as we have today.
But at this moment in particular, businesses cannot afford to
take the "head in the sand" approach. That's foolish at best and does
very little to serve the lives and livelihoods of those who are increasingly
imperiled by the actions of the craven politicians in D. C. If we don't
speak up now about the anarchists holding the debt ceiling hostage and figure
out what we can do to best protect our own ventures against the economic
impacts of the ongoing extortion, there may never be another chance. The
consequences will be enormous -- millions of entrepreneurs will lose the
opportunity to pursue or renew their quests to launch, expand or rebuild their
businesses. And don't even get me started on how many immigrants start new
businesses and presently help run many of the unicorns in the Valley.
I'm not talking about what we can do or not do in D.C. -- we're pretty much stuck with that sordid swamp
and the MAGA loonies for the next two years. It's never really that smart to
set your next-door neighbor's house on fire, but they don't seem to know or
care. This is a Republican version of the circular firing squad come fully to
life.
I just don't want to be part of any collateral damage, and
neither should you. I'm talking about what we, as business owners and
operators, can do to save our own bacon, to try to hold our heads above water
as the floods of calculated misinformation, faux outrage and outright lies
threaten to scare the public, raise the prospects of a recession, and paralyze
our country.
We can already see that the prospects for the stock market over
the next two years are dimming daily now that the debt ceiling has been reached
and there's no relief in sight thanks to the falsehoods and sophomoric stunts
of the MAGA wing nuts in Congress. They're also pulling down the motivation,
confidence, and ability of investors in the VC and startup worlds to make new
moves, follow-on investments, or do much of anything else to encourage
innovation, experimentation, or exploration by new business builders.
Although Trump-backed election deniers fared poorly in the last
election, the now-majority Republican House is busy passing pyrrhic bills to
kill the IRS while talking about enfeebling Social Security and investigating
Hunter Biden. These and other signal actions clearly suggest that we are facing
two ugly years of trials, trauma, useless torments, and other treachery.
The investor takeaway is obvious: better to do nothing and wait
things out than to dig yourself deeper into a hole with no bottom. Which means
that the spending spigots, the marketing and expansion dollars, and the
investment funds (public and private) are all likely to be largely shut down for
2023 and beyond. Forget all the cheap talk about enthusiastic venture investors
and bright prospects for new initiatives - let's wait and see if they step up.
And as far as the Infrastructure Act dollars making up for the depleted
Covid-19 incentives and the temporary and now concluded welfare boosts and
benefits, those shovels won't hit the ground anytime soon.
In the meantime, here are five things that every business needs
to be doing right now.
1. Get Profitable
The days of easy money are over. The odds are likely that you
won't be able to beg, borrow or steal the bucks you need to pay your bills
without demonstrating a clear, short, and viable path to profitability this
year. No one believes in profitless prosperity any longer and no one wants to
see you continue to chase an ever-moving goalpost that keeps receding into the
far-off future. Your salvation and the only smart solution is to take the steps
you need now to secure your own ability to self-sustain the business and
control your own destiny.
2. Make the Deep Cuts Now
Seeing Alphabet and Microsoft announcing layoffs of
10,000-to-12,000 employees and more and more companies joining the downsizing
parade every day gives you plenty of cover and lots of good reasons to make your move now and cut to the bone because nothing is worse for your people or their morale
than for management to be tentative and make a bunch of unending small cuts
instead taking the necessary bold actions now to right-size the business for
the foreseeable future. If you've got to eat a lot of frogs, eat the biggest
one first and get it over with - the slice-the-salami approach never succeeds.
3. Tell Your Board to Back Off
To the extent that your board is largely made up of
representatives of VC firms, it's critical to remember that their post-pandemic
agenda is likely to be far different from your own - not to mention the fact
that, unlike you, your team, and your early angel investors, the money isn't even theirs. Now is a good time to listen quietly to all the advice they're
happy to give - rarely accompanied by new money by the way - and then to do
exactly what you think is best for the business. Often, listening to the lectures and suggestions is far more important and effective than following any of it.
4. Re-Recruit Your Key Players
Post-pandemic almost every CEO will be asking his or her key
team members to re-up, double down and sign up for another couple of years of
hard slogging. Lots of these folks have been at the grind for many years and
this isn't what any of them expected to be hearing at this point in their
careers and in the life of the business, so you need to be sure that their hearts and minds are still in the
game and take steps to
demonstrate to them that you and the company are still committed to them as
well. Show and share with them the new vision and path. Even if the cash is
tight, it also pays to think about recognition payments or stay bonuses for
your top performers. Appreciation and gratitude are nice - cash is better.
5. Let Your Customers and Employees Know
You're in It for the Long Run
Don't forget that the vast majority of even your best clients
and customers have plenty of problems and concerns themselves (as do all of
your employees) and certainly none of them would mind some reassurance from
you, especially when you're cutting people and costs. They need to know that
their own service and support won't suffer, that you're not going to take advantage of them, that their own positions are secure, and that you'll be there
for them in a pinch just as you expect them to stick around and help you over
the latest hurdles. Trust is hard to come by these days and precious - once
it's gone, it's even harder to restore - so get ahead of the problem and
proactively reach out to these folks to let them know what's coming, what to expect, and what provisions you're making to avoid any
interruptions or disturbances in your relationships. It's quick, inexpensive,
and a smart investment.
Bottom line: we don't know how long the circus in D.C. will last
but it's not going to end any time soon and the last things these clowns will
be looking out for is you and your business. Speaker Kevin McCarthy has invited
a bunch of arsonists masquerading as fireman into the House. Before they burn
the place down, be sure you've put yourself in the best position to survive the
storm. Turn your business into a fire hydrant: painful when kicked,
impervious to piss and pissants, stable, secure, and there when you need it.