These days most entrepreneurs are closely guarding their cash – no matter how well their start-up is doing and no matter what sort of spending last year’s business plan dictated. Not only that, it seems that the general consensus right now is that spending in an attempt to grow a start-up is a fool’s errand at best. But is it? As the Wall Street Journal reports, some businesses that haven’t been as dramatically impacted by the recession are questioning whether they should continue hoarding cash, or whether it’s time to spend in an effort to elbow out some of the weakened competition:
“At a recent board meeting, Jaspersoft Corp. Chief Executive Brian Gentile found himself stuck between two camps: the savers and the spenders.
One faction of the San Francisco software company’s board wanted Mr. Gentile to preserve the start-up’s $15 million cash reserves by keeping expenses down. Other directors urged him to grow and take market share from rivals weakened by the recession.
‘It was sweaty, it was tense,’ said Mr. Gentile of the November meeting. ‘It was literally a two-hour rejustification of why we’d defy the odds.'”
Such is the struggle that many businesses are facing right now. Do you take the risk that comes with spending and potentially weed out competition and grow? Or do you save, bide your time, and focus on growth only once the downturn’s over?
For this week’s survey question, we thought we’d ask what your strategy would be if you found yourself in the position to make such a decision. Sure, there are all sorts of variables that would figure into such decision making, but we’re asking you to ignore that, because this is pretend. So: if you’re in charge of a business that isn’t struggling too badly right now, what do you choose: spend in a bid to push out some of the weakened competition, or hunker down and cling to what cash you’ve got? Tell us what you think by clicking to vote in the survey below:
Entrepreneurs are always looking for new business opportunities—but are there some ideas that simply cross the line? We ask because of the slew of swine flu-related start-ups that have suddenly flooded the market. There’s swine flu t-shirts, viral swine-flu video games, and “designer” swine flu masks. Some advertising agencies are even floating the concept of guerilla marketing campaigns where brand names would be emblazoned on surgical masks intended to protect people from contracting the virus (well, maybe).
Not surprisingly, some of these start-ups are actually doing pretty well, according to TechCrunch: the Swine Fighter game got more than 150,000 hits in under 24 hours, and made the front page of Digg. Not to mention that the t-shirts, ad campaigns, and surgicial masks are all getting plenty of media and blog play.
In light of all these swine flu-related business plans that have cropped up, we thought we’d hold a mid-week mini-poll on the topic. Are swine-flu related start-ups completely tasteless and just wrong, or are they simply an example of savvy entrepreneurship? Tell us what you think by clicking to vote in the survey below or by sharing your thoughts in the comment section below.
(Image via TechCrunch)
It’s long been said that entrepreneurs are a particularly optimistic bunch—seeing opportunity and a potentially profitable business plan where others don’t. Still, we were surprised by the rosy response to this week’s survey question. Earlier this week we asked whether you thought the economy had hit bottom, and whether we’re on the way back up—or not. Certainly there are some positive signs: the market, while experiencing its share of ups and downs, has had some great days. Layoffs seem to have tapered off, and even the Fed’s Beige Book survey was more optimistic than it’s been in recent months. But are all those signs just tiny blips of light on a dark, dark radar screen?
Nope, you said. All survey respondents this week replied that the economy has hit bottom, and that these small signs of improvement are an indication that things are rebounding. Reader Christyj writes:
“I think we are resilient people and after a while we don’t let the doom and gloom of the economy keep us from moving forward and accomplishing our goals. Eventually things are going to get better.”
Here’s hoping you guys got it right.
It may seem somewhat ironic, on a day where the Dow plummeted to its worst loss since early March, to ask whether you’re optimistic that the crisis has reached its bottom. Still, the national mood recently seems to reflect the idea that the economy is showing ever-so-small signs of improvement. For instance, the Fed’s Beige Book survey—an anecdotal report on economic conditions—was “slightly more optimistic than last month showing that the pace of economic decline may be starting to moderate in some parts of the country,” reported the Wall Street Journal last week. Unemployment numbers also dipped last week, and for the first time in months, fewer people applied for unemployment than in the previous week.
So, for this week’s survey question, we’d like to know what you think about the state of the economy: have we hit bottom yet? Is the worst over? Or are the small bits of positive news simply tiny anomalies amidst a sea of negative signs? It’s not as absurd of a question as it may seem. Consumer confidence is a strong indicator of economic conditions, after all. So with that being said, tell us what you think by clicking to vote below and by leaving your thoughts in the comments section.
Few things are certain when it comes to the economy these days, but at least this much is clear: when it comes to “fixing” the economy, everyone’s got a plan. It seems like all we have to do is flip on the TV or log on to the Internet to hear what yet another person thinks is the best way to solve the nation’s woes. But we’re tired of listening to all the pundits and talking heads blabber about the Main Street vs. Wall Street divide, and their suggestions for fixing the epic fail that is the GM business plan, as well as the myriad of other issues plaguing the country. We’d like to hear what real people think.
So for this week’s survey question (if you can call it that), we’d like to tell us what you think is the best way to fix the economy. We’re taking anything and everything that you’ve got, people. And no, you don’t need a background in econ, nor do you need some special insight into the inner-workings of government to answer this question. We just want to hear what your common sense is telling you. Sound out using the comments section below.
You people want blood. Or, at least, so the results of this week’s survey indicate. On Monday, we asked whether you thought the outrage directed toward bank and AIG execs had gone too far—and with good reason. The New York Times reported earlier this week that some AIG execs had received death threats, and that readers had even written in to the editor suggesting French Revolution-style beheadings. But we didn’t realize just how prescient our post was until was read about the near-revolt happening in Europe right now:
“Tempers are flaring across Europe as the economic pain deepens and more people lose their jobs.
Just ask Fred Goodwin, the former chief executive of the ailing Royal Bank of Scotland, whose house and car were vandalized early Wednesday. Or Luc Rousselet, the manager of a 3M factory in France, who was barricaded in an office for a second day by workers demanding better severance packages for 110 employees who are being laid off.”
Tempers are flaring, indeed. And if this week’s survey results are any indication of the national mood, it’s easy to see why. Facing lower wages—or no job at all—workers are naturally angry that the very executives who got us into this position are seemingly still cashing in at our all expense. Perhaps that’s why 80% of our survey respondents said that they didn’t believe that the public outrage toward AIG and other bank execs has gone too far. Dole out punishment where punishments due, in other words. Still, a smaller fraction of you expressed some reservations over the magnitude of the anger. Writes reader Christyj:
“I think they should be punished in the pocket book and return the money… but I think things are going too far when they have to hire a security guard to feel safe.”
But for those of you who feel otherwise, enjoy this clip from Stephen Colbert:
One of the age-old adages of running a business is that you should always listen to your customers. This week Facebook apparently learned that lesson. Well, kind of. After a site redesign that sparked all sorts of screaming and yelling, the social networking site announced today on their blog that they’re taking their customers words to heart, and will be making some changes:
“Whenever we build something new or tweak something old, our motivation is the same: to help you share with the people you care about and find out what’s happening with them. Before we launch any new product, it first must pass a process of design, development and testing with a more limited user audience. If those results are satisfactory, we then release it for all of you to use. We know that no amount of testing is as valuable as what you have to say. For this reason, we will always look to you, our users, to tell us what is working and what isn’t so we can continually make improvements.”
Except they’re not exactly going back to the old design either. They say they’ll be making changes and improvements based on feedback, which is somewhat odd, given that much of it has been a straight-up demand for the old design back. In some ways, Facebook’s dilemma is clear: everyone knows the old adage, if it ain’t broke, don’t fix it. But in technology not moving forward is almost tantamount to going backward. So striking a balance between the two—while dealing with unhappy customers—is tricky no matter how you dice it. And it’s a sticky situation that many business owners and entrepreneurs in variety of industries have had to deal with—particularly when it comes to finding ways to assuage customers angry at “improvements.”
Given that, as well as the brouhaha over the Facebook redesign, we thought we’d hold a mid-week mini-poll: from a business perspective, do you think Facebook has made the right decision in sticking with the current design (tweaked)? Perhaps you think they should listen to their customers and revert to the old design? Or is there some middle ground?
Tell us what you think by commenting below!
As an entrepreneur sitting on a business plan right now, it’s easy to start feeling serious outrage over how companies like AIG have mishandled government bailout cash—particularly if you’re seeking capital for your own, job-creating start-up business. We’ve spewed plenty of vitriol at banks who’ve, in our opinion, misused cash for employee bonuses and other extras. And it’s hard not to feel a little angry when stories come out like the one today about how JPMorgan Chase is in the process of building a new $18 million private-jet hangar in New York—after it received $25 billion in bailout cash from the Feds.
But has the outrage, vitriol, and hate gone too far? While employee bonuses strike us an egregious use of bailout funds, at the same time, projects like the hangar keep money moving and pay wages for local workers. Where does the legitimate concern and outrage toward banks and firms like AIG end and the witch hunt begin?
Given our own proclivity for throwing barbs at the banks, you may be wondering why we’ve softened up. Blame it on the New York Times. They made a pretty strong argument yesterday (in the Style section?) for the case that the anger has gone just a bit too far:
“Edward M. Liddy, chief executive of A.I.G., read letters to Congress on Wednesday in which company employees were threatened with death by piano wire. Senator Charles E. Grassley, Republican of Iowa, suggested bonus recipients commit suicide (later explaining his remark was ‘rhetoric’).
Reader mail sent to The New York Times in response to articles about these executives’ formerly high-flying lives repeatedly mentioned the guillotine and suggested it was time to ‘bring back the tumbrel,’ a crude two-wheeled cart that was used to publicly carry aristocrats toward public execution during the French Revolution.
There is something a little scary about all this rage – and not just to those who are on the receiving end, some of whom have hired security.”
Do you agree? For this week’s survey question, we’d like you to tell us whether Americans are going overboard with the outrage. On one hand, having anger and frustration toward execs who’ve contributed to the economic downturn—and who seemingly continue to rake in the big bucks—is perfectly normal. As Americans, it’s our right to be outraged and to do something about it so the same missteps aren’t made again. But at the same time, has it gotten out of hand? Tell us what you think by clicking to vote in the survey below. Naturally remarks made in the comments section are warmly welcomed as well. That is, unless they’re death threats.
The big economic news this week among entrepreneurs and those of you gripping a business plan is the government’s new strategy to stimulate lending. The plan, which President Obama announced on Monday, calls for reducing fees on certain Small Business Administration-backed loans, upping the percentage amount the SBA will guarantee on loans provided by banks, and offering $15 billion in new government capital to buy securities backed by SBA-guaranteed loans. The administration is also promising greater oversight of the banks who received federal aid. 21 of the largest banks will have to turn in monthly reports to the feds detailing the loans they’ve handed out, while many of the smaller banks will turn in quarterly reports.
So what do you think? Will it sufficiently stimulate lending? Or is it just another government plan that won’t do the trick? For this week’s survey, we put the question to you. The results were skewed strongly in one direction this week: 88% of you said that you believe the Obama administration’s new plan to stimulate lending is a solid step in the right direction. Said reader Ellen:
“How else is this economy supposed to get up and going again?!”
Her viewpoint has been echoed by many entrepreneurs throughout the nation. We quoted an entrepreneur from Philadelphia earlier in the week who said that this new policy will “have a direct and immediate impact at the ground level, by leaving money with the businesses,” and most of the press has been positive.
Still, there are some voices of dissent. 11% of our survey respondents say they believe the new plan is simply insufficient. While we’re guessing this means they’d wished the federal government would have made a move to get money directly to entrepreneurs, or to offer tax credits, no one articulated the rationale behind their no vote. But entrepreneur J.R. Johnson, who owns a start-up in California, wrote an argument in the San Francisco Chronicle this week which articulates the issue many of the plan’s critics have:
“This is a step in the right direction, but it falls short and it doesn’t excite or encourage entrepreneurs to get off the sidelines.”
For this week though, it appears that Obama’s plan has more supporters than it does naysayers. We’ll keep close watch on how it shakes out for those of you seeking a loan with your business plan.
The buzz in the small business world this week is President Obama’s new plan for stimulating small business lending, which he announced yesterday. For those of you working on your business plan, this is the government program for you. Briefly, the plan will reduce fees on certain Small Business Administration-guaranteed loans, and insists on greater oversight of lending by the banks receiving federal aid. The Obama administration also announced that they’ll provide up to $15 billion in new government capital to buy securities backed by SBA-guaranteed loans. So far the plan has received both praise and scorn:
“What the president is doing now,” entrepreneur Marco Lentini told the Philadelphia Inquirer, “will have a direct and immediate impact at the ground level, by leaving money with the businesses.”
But then there’s entrepreneurs like Vivianne Robineau, who tells MSNBC:
“Robineau doesn’t see much hope in the president’s new small business plan. ‘I’m not sure it’s going to affect us too much, to be honest.'”
What’s unarguable is that as of right now, small business lending is dramatically down, something the January figures from the Treasury Department clearly reveal. The question is whether the new Obama plan will hit the sweet spot in terms of stimulating lending. So for this week’s survey question, we’d like to know what you think. Based on what you know about the new plan, do you think it will do anything to increase lending to entrepreneurs and small business owners? Share your view by clicking to vote in the survey below: