Time Capsule: This Is No Time for Timidity: Contrarians Who Take Bold Steps Instead of Moaning About Poor Financial Conditions Will Win
I wrote weekly editorials for a boutique industry newsletter for several years, anxious for both audience and income. I learned a lot about coming up with ideas for the weekly grind, trying to be simultaneously opinionated and entertaining in a few hundred words, and not sleeping much because I was working all the time. They’re fun to read as a look back at what was important then (and often still important now).
I wrote this piece in September 2008.
I bet every healthcare IT vendor wishes they were a mortgage lender. You make enormous profits for generations, pay gunslinging financial cutthroats salaries of up to hundreds of millions of dollars, and when the music stops on all those illogical investments that racked up obscene profits for years, you cry "Uncle." Uncle Sam, that is. Help, I’ve fallen and I can’t get up … come quick and bring your checkbook.
Unlike those investment clowns, healthcare IT companies die quietly when their time comes. Maybe they run out of cash, exceed the abilities of their founders, or learn the hard way how little they really know about their business. Those who can’t cut it slink off to the Great Vision Center in the Sky. Tough old world.
I’m not only a free marketer, I’m a Darwinist contrarian. You cannot succeed just doing what everyone else is doing. Sheep happily follow each other to the slaughter. The time to take bold action is when everybody else is too scared to, like now.
I have no data to back it up, but here’s what I believe. You hit your financial home runs when times are bleak, not when the exuberance is irrational. Buy when everyone else is selling. Expand when your competitors are cutting back. When the pendulum inevitably swings back, you’ll look like a genius. Those with the big brass ones will win.
There’s no doubt that credit will be hard to get, and rightfully so. But think about this: investors looking for stock market alternatives weren’t raised on plunking cash into unsexy bonds or gold funds. Companies with a track record and a good story will find investors. Maybe it isn’t the best time to run an IPO since stock prices follow the market down, but private investment should be ripe for some smart deals. Buy a competitor, replace unproductive employees, and make unpopular decisions while everyone is preoccupied with the Dow’s latest drop.
Vendors may see the customer pipeline start to dry up. Fear, rational or otherwise, makes people hunker down. That’s not the ideal situation, but it’s a good time to take a breath, look hard at product lines and strategies, and figure out a strategy for 5-10 years down the road. Sharpen the saw in preparation for the spring that inevitably follows winter.
It would be great if economic conditions sucked less, but you play the cards you’re dealt. Down markets eliminate weaklings. Survivors come back stronger than ever. The decisions you make today may well lock in a future (good or bad) that will persist for decades.
While all the timid MBA suits are whining, stuffing their money into mattresses, and telling everybody how well they could have done if the bad old market hadn’t betrayed them, real businesspeople will be quietly making moves to take advantage of current conditions. It’s a zero-sum game. You get to pick: on your feet or on your knees.