January 5, 2009

Is It Enough?

rickgibsonMy Obsessions
Is it Enough?

The big dirty secret. Clearly, no one wants to talk about this. When we do a sales forecast, no matter how confident we are, we’re usually sensitive enough to our audience to make the picture look pretty reasonable. That also includes the supposedly brilliant fed finance guys who keep mis-forecasting the ongoing U.S economic bailout. However, if we were living in a totally transparent world, guys that do these forecasts (the feds) would pay more attention to whether we have allocated Enough money and get it right the first time. Problem is, investors or in this case, the public, would never agree with it. So forecasters are forced to make their case incrementally, over time, which makes the situation get progressively worse.

This is different from the normal world, where if you have a willing investor, you should make sure to get enough money the first time, since you may not get another trip to the buffet line.

P.S. Newsflash… I just heard I am going to get a billion dollar bailout. Hooray! I didn’t want it, but the government said I had to take it, to help insure the public wouldn’t worry. (Now see how silly that sounds!)

Advice to Entrepreneurs
Accordion to me…This week’s advice to entrepreneurs

Surviving in 2009. Whatever you do, you must last to survive. No matter what your company does, make ‘lasting’ your New Year’s Resolution. Chances are, this year you’ll have less money to achieve your goals than you originally planned. Right now, put pen to paper to figure out HOW you can last. Change your focus from achieving greatness to… surviving long enough to have sufficient opportunity to evolve your plan, so you can ultimately achieve greatness. Confusing? It is for me, and I wrote it.

Another dirty secret. Wherever I go, people are still asking what’s changed with the recent big shift in the economy. Two big phenomena occur to me. First, those investors who still have lots of cash, are now looking for deals at 30% of what they were six months ago. A necessary part of that reduction is to cover the possibility that the economy may continue to take a further dive. Second, with things being so radically impaired, those less well-blessed investors are looking at previous deals with a new goal of return OF investment, not return ON investment. (I’m hoping you understood this the first time you read it.)

As compared to what? Get ready for that question. Your market is big, compared to what? Your product is better, compared to what? Your team has more experience? Now…you get it.

Other ideas to help keep you tense….Be careful what you wish for, you might get it. And, when you ask a question, you better know the answer.

Got an idea or something you need help on? Email me at rick@hotventures.com