Monday, March 10, 2008

Opportunity In The Current Economic Environment

Well, it's Monday morning and I'm doing my normal review of news and announcements. It's definitely a slower environment. There is a lot of talk about the economic slow down. Obviously, this is a self-perpetuating situation. As people hear more about a slowing economy, they become more cautious (if not downright nervous) and they develop a wait-and-see attitude towards their next strategic moves. (This seems to be happening in the Microsoft-Yahoo situation, but who really knows what Microsoft is doing or thinking.)

I wholeheartedly believe that times like these can present the greatest opportunities. Everyone broadens their vision and companies might be willing to listen to ideas that they would ignore in boom times. After all, when companies are making a ton of money with their current strategy, they aren't looking for new ideas. They are generally just focused on executing the strategy as well as possible to capitalize on the environment of success.

However, when things start to slow down, companies start reconsidering what other avenues might be open to them. They will re-examine their strategies and take the extra time to listen to some new ideas. This presents a great opportunity to creative companies to propose new relationships or deals that might not have been considered in a busier environment.

I encourage everyone to think outside the box, look for new ideas, look at new potential deal partners, and don't be afraid to communicate and consider. It is in times like these that the deck gets reshuffled and you don't want to be left out of that mix by sitting on the sidelines. The decisions you make now will determine where you are situated when things heat up again.

Saturday, March 8, 2008

Slow News Days -- Or Perhaps Not...

I look through the news daily, mostly just to keep myself informed. I'm also looking for interesting items to blog on. As you can see, I haven't written a blog entry for almost a couple of weeks. I've been looking, but honestly, I just didn't see anything that caught my eye or sparked any big thoughts. Maybe it was me, or maybe things really slowed down.

Clearly, the economy is struggling a bit. I think that has made dealmakers more cautious. (No one likes to buy anything that's on the way down.) Personally, I think values will go down a bit more and some bargains will appear, and the deals will start again. That's the nature of economic cycles. In fact, the Fed should be careful not to prop up the economy too much with interest rate decreases (if indeed that strategy is still working). That will only stall price corrections in company values, and those price corrections will actually spur more deals than cheap money. (And cheap money doesn't help if lenders are too nervous to lend, and that seems to be somewhat the case right now.)

I think the other point that slowed me down on my blogging is a lack of any real big technology breakthroughs or announcements. After all, for the past several years it has been technology that has driven much of the revolutionary changes in the entertainment industry. However, when I thought about looking for major technology breakthroughs on a daily basis, it made me laugh. Have we really come to expect major developments and announcements every day? I know I have. I expect to open my email in the morning and see something amazing -- every morning. That's funny. It tells me just how fast things are really moving.

When our expectation is that something great will happen every day, that would indicate that a whole lot of great stuff has been happening for a long time. And that's true. Let's not forget that we live in the golden age of innovation. Economic cycles are no match for rampant creativity and entrepreneurial spirit. We are still surrounded by more innovation and creative energy than ever and I am confident that the string of amazing advances in both technology and business will continue for the foreseeable future.

Personally, I'm not that worried about a week or two where things slow down a bit. In fact, perhaps it's good to catch our breath once in a while, sit back and reflect. The calm moments between creative bursts are as important to the process as the big announcements.