Trying to survive the recession? Swim upstream.

I get asked by customers and other entrepreneurs quite frequently these days: when do I think the economy is going to turn around?  Of course, like everybody else, I don't have any idea.  What I do think is remarkable is how quickly things turned bad.  In one month, things went from looking slightly down to everybody slamming on their brakes.  In the explanation of this phenomenon might lie some of the answers we are all looking for.

Even in the aftermath of September 11th, consumer demand and global markets did not drop as sharply as they did in late September and on into October.  Surely the shock of 767's flying into skyscrapers was more terrifying to the average person than the failing of Lehman Brothers, an insitution whose business most Americans could not accurately describe? This makes me think that everybody was feeling over-extended and over-borrowed, and was just looking for an excuse to be afraid.  In other words, we were already afraid, but keeping it inside, and as the house of cards started to wobble everybody started blowing.  Carrying large balances on credit cards, buying houses we couldn't actually afford, having to spend $100 to fill up our tanks--it all just got too overbearing.  Suddenly, being reasonable and responsible felt better than trying to be cool and keep up with the Joneses.

But this national psycho-reversal, assuming it happened, still doesn't explain the supposed complete suspension of consumer demand.  Perhaps it was the reporting of the initial "smoke" of the financial crisis by the 24 x 7 media (yes, especially the bloggers) that actually fanned the flames into an inferno?  For those of us who haven't lost our jobs, what has actually changed about our purchasing power?  Gas is 50% cheaper than it was two months ago.  Everything is on sale at the shopping malls.  It hasn't been this cheap from an inflation-adjusted perspective to buy a house in over a decade.  Your dollar even goes further overseas.  So, if your income is still the same, your purchasing power has almost doubled!

The answer is, I believe, that we live in more of a fear-based economy than ever.  When people are afraid of what lies ahead, they examine every behavior, every purchase, every career decision.  They also stop taking risks with their money and their jobs. 

So, if you're like me, you're wondering what this all means for the future of entrepreneurs and small business owners.  First, consumers are definitely cautious, and buying their necessities plus a few low-priced forms of entertainment (good for movie theaters, Walmart and Hooters, not so good for luxury resorts and high end restaurants).  Second, there are fewer businesses taking risks or spending "into the wind."  Which means, there is an opportunity.

If you can find a way to tailor your products and services to meet the needs of the cautious consumer, it has never been cheaper to advertise your services and build your products.  Employees are just looking for a steady paycheck and good benefits.  Customers want great value, and even better service.  Media outlets of all kinds are dying for your advertising dollars, no matter how small.

The businesses who will survive this downturn are the ones with real customer bases, great value, and high quality products and services.  The businesses who thrive at the end of this downturn are the ones who will find opportunity and hope where everybody else sees downturn and dispair. 

As my grandpa used to say, when you're swimming upstream all you have to do is open your mouth if you want to catch the fish. 

--jsk

Comments

[Chris Andrew]

Nice post. Definitely an issue of opportunity vs emotion. There's a lot of conflicting advice out there, but this post has some similar observations - http://www.techcrunch.com/2008/12/21/fear-kills-businesses-dead/

[R. B. Chandler]

I think I'll start with the lame excuse as to why I haven't been reading your blog posts lately. I've just been way too busy working on my web sites and my brother's web sites. The Gold Plus package came at a really good time for me, thank you for that, and I've been thinking of ways to use all that space up. The never-ending story continues even as I set up other web sites for my adventure into the real world (www.unitedearth4peace.org and www.galacticenterprise.org (shameful self-promotion)) in the near future.

I think the world will recover. You can only blow up a balloon so far before it busts. I think things will settle out at a more realistic level before we can begin to blow air back into the balloon. It is a cyclic thing with humanity and the only way to break the cycle would be to take money out of the equation. Of course that is not going to happen in the near future. We always reach a little higher than the cycle before the current cycle. My boss would say we are doing the wrong thing better and I would agree with him but we have to work with the material that is in front of us.

[Penny Ciocchi]

Dear Justin, Your customers need the capability to put an RSS feed from our own web sites. Can you push this along? Is it in the works? Thanks, Penny

[Aseem Kaistha]

Dear Sir,
A couple of months back I had written a mail to you seeking help for my lost username and login. I am being debited $4.99 every month against my credit card. I am will to use the site but I need to know the details so that I can build the site and login. Kindly do the needful and oblige... Please Help

Your action will be highly appreciated. Regards Aseem Kaistha

[Brenda]

Hello,

I find it really funny that I was looking at your site thinking it would be a good idea to get your software to make my website but then things started going wrong... I clicked on the free trial and was redirected to "Please update your browser to IE5, Netscape 6 or FF1.0"!!! Well, I'm running Firefox 3.0 so I guess somethings wrong. Then I click on "customer support" but it wants me to login, but I don't have an ID yet since I can't get the free trial!!! So then I click on "help" but it only works if I have an account... Honestly this is not the way it should work if you want people to visit your website. Kind of ironic isn't it??? And I was unable to find out what the specs are as to hardware and software untill I figured it out! Do you realize that more and more people, companies, and governments are migrating to Linux? How is it supported? Apparently not here, and it makes me wonder how all your customers are being left out of a growing market... A person would have to be a bit out of touch for not supporting such a growing market, especially when it's so easy! If most websites on the planet can support browsers from 3,4,5 operating systems, why don't you? BTW, just for your information, even my 71 year old mother is using Linux without problems (she got fed up of the MS blue-screens), so please don't tell me it's just for nerd's.... Hope you're listening! B.B.

[Rhonda]

Dear Mr. Kitch;

I began using your site in 2003, knowing very little about web site building. Today I work for 2 other sites than my own and I have advanced enough to script dynamic web content. Since your software doesn't provide different types of .js elements, I have been forced to use either a script from dynamic drive or something similar. When posting the script to my site, by uploading the .js or .css and then writing the html for the scripts your site overrides everything I do and placement and element tags become issues. I have created help tickets, spoke with several of your help center folks on the phone, to no avail. I will be moving all of the sites as soon as I can, as I have also asked to speak with Thai Bui to assist in resolving my problems. It would seem to me that your site would have something similar to Network Solutions where someone can write their own scripting without all your global gobodly gook getting in the way. I am very displeased at how you are handling all the issues folks are having with this, and will make certain, not to endorse Homestead.

[MICHAEL LUSK]

I do not have a credit card

[R. B. Chandler]

I've noticed that it is possible to outgrow Homestead. But, when you do it seems to be at a point where you could actually write the code that the SiteBuilder now writes for you. Yes, there may be a point when you need to move beyond the limitations of what can be done on Homestead and go somewhere else. However, for those of us who still have to lookup things like a basic Iframe code and cut and paste it to my web site every time, Homestead is still the only real option there is if you want a good nice looking web site and can't afford a real web master. It takes time to learn some of the tricks and find java scripts that work well with Homestead. Homestead wasn't made for masters of the Internet. It was made for normal people who have no clue what html stands for but want to build a web site anyway. I could not have some of the web sites that I do without Homestead, I just don't have the skill or knowledge. Even still, it has taken me years to reach the level of skill I now have, which really isn't saying much. Yes, there are some who will bump into the limitations that can come with any product But, I haven't hit the wall yet and I doubt that I ever will.

[Michael]

As a long time subscriber to Homestead I'm starting to become more and more unhappy with the product -
While some new features have been added over the years, there are still so many enhancements that could be added.

ON-LINE FORMS - the current forms component is sadly lacking and needs more functionality - its too simplistic.
GRAPHICS - so many of the delivered graphics are not professional and seem geared towards a website for children.
MAC SUPPORT!!!!! As an avid iphone user - I recently purchased a new iMac computer - however I can't use homestead sitebuilder with my iMac - so I'm forced to retain my old clunker pc to do updates to my site

When Intuit bought Homestead a few years ago I had hoped there would be lots of improvements and enhancements but sadly few have come about - what gives???

[Neil Forscutt]

I have an account with Homestead.

I am in Australia.

I have just changed my login email address and now Homestaed does not recognise it.

I may have mangled the email address when changing it, but I don't know.

I need help to sort this.

I am sorry to approach you in this manner Justin, but I cannot find any other way to contact a live person at Homestead with my problem.

The URL is Willowtreeauctions.com

[Neil Forscutt]

I solved my problem. A dot plus au added to the email address.

When an illiterate like me loses or forgets how to login to Homestead there is no way the people in Homestead can be contacted. Even the help page, designed to assist people who have lost their email or password, cannot be accessed without logging in.

That is far more than a catch 22.

[John Dunne]

i want to cancel my web site but i can't find any way to contact you. Please email me at jdunne3@comcast.net and confirm this message and terminate my web site.

[WANT MY MONEY BACK]

I have been trying to get a refund from you PEOPLE since JUNE 24h and I cant get any help!!!!!!! Do you think the CEO can do something!!!!!!!!!!!!!!!!! this was a trial storefont site and I decided it was going to work for me 1 day later and have called in 5 times and emails 16 times and still havent gotten a refund and now you just billed my account again!!!!!!! I am LIVID! I want my money back and this freakin account closed!!!!!!!!