Saturday, June 26, 2004

Survival for Your e-Company

I came across this practical Advice From a Media Veteran By J Moses, president and CEO, UnderGroundOnline (from the excelllent

Get to breakeven fast: The world changes when you're self-financing. Get there with great speed. Make certain that every employee in your company understands what it takes to get to breakeven and that revenue target is posted in workstations.
Understand your business: Vertically integrated businesses were created by the infusion of too much capital into start-up companies. Pick a business. Do it extremely well. Don't deviate.
Be Darwinian: "Those that are most flexible survive." Pay attention to the market and build a flexible business.
Conserve your cash: Cash is the lifeblood of a company. Spend it wisely and hold on to as much as you can for as long as you can.
Make sure your infrastructure is in line with your revenues: Don't be fooled by spreadsheets. Build a cost structure that can be supported by real revenues.
Simplify, Simplify, Simplify: Now is the time to be like Thoreau. Your systems were probably built for a much larger model and therefore are more complicated than they need to be. Attack them and make them simpler.
Break down the empires: Your managers are emotionally attached to your old business: they built it and they'll do nearly anything to keep it intact. Do your own analysis and be decisive.
Renegotiate future obligations and contracts immediately: There will never be a better time to improve your balance sheet and to renegotiate contracts. Be aggressive and put together long-term deals now.
There is less traffic on the high road: If you decide to affect changes in your headcount be honest, direct and handle the lay offs with compassion. Treat your outgoing employees with the respect they deserve and you'll get it in return, in spades.
Don't look back: There's nothing you can do about your past actions except learn from them. Sunk costs are just that: sunk. There -- you just got the benefit of my business school education.
Communicate often: Most of your employees have never seen a recession in their business lives. If you don't communicate, they will assume the worst. I meet with every person in the company at least twice a month. Morale will take care of itself.
Open your books to the company: Share financial information with your employees on a regular basis and they will be more invested in the Company. It's scary at first, but it works.
Keep the heart and soul of the company intact: Understand the core assets of your company and protect them with great tenacity. The long-term value lies within them.
Get your hands dirty: There is no room for hierarchy and politics when times are difficult. Everyone at UGO has a functional responsibility. I am heading up sales and it is fun.
Continue developing your brand: Your marketing budget is the easiest to cut. Don't abandon the effort. Improvise by buying cheap in the market or implementing guerilla marketing techniques. Remember, you can benefit from the downturn in the ad market.
Service your customers: Help them solve their problems and they'll help you solve yours.
Raise funds constantly: As a small private company, you can never have enough cash. If possible, dedicate a partner to investor relations.
Understand the value of your options: Getting inflated options at Internet media companies in the past was ill advised. Getting low-priced options at a well-funded Internet media company today makes enormous sense. Believe in your equity and treat it with great respect.
Swim upstream: Believe in what you are doing even if it means being a contrarian. People of vision build great businesses. The history of the media business is littered with naysayers.
Hit your revenue goals: And all that is good follows.

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