Calibrating Attitude For Maximum Profit
There's no denying it any more--we live in a completely different world than we did six months ago.
The rules of the game have changed. Now you have to decide if you're going to change with them or get run over.
I saw this coming and blogged about it, as did a few others. Then I stopped because everybody was clinging to the 2007 version of reality--nobody wanted to hear the truth. I've been watching with interest as the tech and VC communities have slowly come to grips with what's happening in the larger economy, swinging wildly from the "everything will be peachy" camp to the "head for the bomb shelter" mindset. So it goes.
In truth, neither of these is productive. They both represent reactionary mindsets, not proactive mindsets.
People need to get a grip and stop thrashing.
What I don't see enough of are people willing to look at the reality of the situation and spot the opportunities. There are always opportunities. The richest people in history--the Carnegies and Rockefellers of the world--made their fortunes in the midst of the greatest financial crises we've had in this country.
Busts always follow booms, and so does opportunity. Out of the panic of 1837 came the transcontinental railroad system. Out of the Great Depression we got electric light, refrigerators, radio and so on. Out of the tech bubble we got the Internet.
In fact, the amount of opportunity seems to be closely related to the size of the crisis.
If that is true, we're staring at one hell of an opportunity.
The people who maintain the proper attitude are the ones who are going to come out on the other side of this crisis with fortunes. This means being realistic, but not sticking your head in the sand.
It's going to get bad. Very, very, bad. I am fully expecting another Depression. I think you're delusional to be buying assets right now.
Now is the time to hunker down and BUILD things. Especially in high technology, people have the unqiue ability to create something from nothing--to spawn from their brains something of value that improves peoples' lives.
The system has dictated that there will be no more free rides. Either provide value, or die.
You cannot expect to make a profit right now. The US is shell-shocked. It's a deflationary Nightmare Before Christmas right now. Everybody's wealth is evaporating.
But if you're building something valuable, you're being given an interesting opportunity--the marketplace is being cleared for you. Your fat and complacent competitors are getting their heads cut off. And the explosion of the economy has left valuable innovation and technology lying all around, just waiting for you to pluck it off the ground and polish it up for the next credit expansion.
There's no telling when that expansion will come--the powers that be are trying their damndest to keep the bad debt from clearing the system, and that must happen first--but you need to be ready for it. Don't be Pollyanna, but don't be Eyeore either. Keep your eyes open.
If you can position yourself properly and catch the updraft when it happens, you can make bank. Weathering the storm will be the hardest part.
