I have been following the stream of news and blog posts on the current financial crisis. Om Malik has just written a good one here. I wasn’t sure if I should be writing about it since I am not a financial expert (I spend and save money on a futile scale ;-) ). Like everyone I am busy with this financial crisis, both privately and within my responsibilities at my startup company. One thing that strikes me is that the “keeping up appearances” act of many people seems to be blown away by panic and uncertainty.
These are difficult times, no doubt about it. People are going to get hit hard by this crisis. And that’s a terrible thing. But in difficult times there seems very little leadership. Silicon Valley startups and the ecology that surrounds it lives with certain air of self confidence bordering to arrogance. If you are in that game you need to be a bit arrogant, self assured, and acting like you’ve been there and done that before. It’s an attitude that gets you everywhere in good times. It’s an attitude any CEO or investor expects and lives up to him or herself. It gives everyone the comfortable feeling of control.
But things have changed radically. And the panic and desperateness we see now isn’t just a result of financial loss. It’s even more the result of the feeling of loss of control. Those that felt they were on top of the world are painfully realising that there never was control. The attitude and feeling may have been there, but in this crisis we find that control was only fictional, and even that is gone. And it scares everyone.
In times like this we need real leadership. People that understand the complexity and dangers of this crisis but at the same time try to make the best of it. It’s not the end of the world, although it will definitely be the end of many startups and big companies. Leaders know what to do and lead the way for us. They do not panic, but simply deal with the situation. In these times leaders can be found easily and I would advice angels, investors and CEO’s to closely monitor both colleagues and management of the companies they invest in. This is the time were you will find if someone just had a great appearance or is actually a leader. Leaders will start making the right moves, cut down costs, work with a lean and mean organisation and most of all remain customer driven. They will only invest in things that create value for their users and they will not pursue things that are just great ideas. They will help others to find their way back into the game and deal with it. Ron Conway seems to be one, Howard Lindzon, Tim O’Reilly, they have been there before and they deal with it. There are many more to be found out there.
This is the time where “keeping up appearances” isn’t good enough anymore. This is the time where the men are separated from the boys. We are going trough some really uncertain times. But if you realise you enver really had control in the first place then things aren’t all that different. Sure money and investments are a major issue now. But at the same time great leaders already take care of their burn rates and focus on the stuff that matters. They don’t have the attitude, they live it. And they will be the first to get through this crisis and find the way back up to success.
I hope we will get through this and bend this around to a way up again. But one thing is for sure. We are learning a few tough lessons now we would never have learned during good times. I suggest we stop this panic and deal with it.