Mike Tyson is famous for saying “Everyone has a plan until you get punched in the face”. While most people haven’t experienced actually getting physically punched in the face, we all endure challenges which can feel that way. With the Covid 19 outbreak, businesses of all size are learning how fragile they actually are. Every business is a system of inputs and outputs.
Rewind to 2008
Twenty five years ago my wife and I started the first online cruise travel agency. It’s hardly a big deal now, but at the time no one else was doing it. We got featured on the front page of Prodigy (if you remember that service before AOL) and things exploded in a small business sort of way. We never got really big and eventually the larger companies caught on and started eating our lunch. So we found a niche in the travel space and became the third largest seller of that product.
That was until they went out of business in the financial crash. Almost over night our business was gone. It became an issue of trying to sell oranges to someone who wanted apples. If it had been one of the major cruise lines it would have been a simple pivot but this was a destination that other lines didn’t go – the Mississippi River.
It was 2 years until a new company emerged. During that time, we were able to find substitutes for some of the people wanting to travel. Otherwise we had to expand our market a bit so this wouldn’t happen again. We maintained our customer list and stayed in touch with them periodically to give them updates on what we knew. Then when the new owners took over, we just needed to send an email to start over. Business didn’t bounce back overnight but it did slowly pick back up. We continued to expand in the other market areas since we did like those products and we didn’t want to be in a position where all the eggs were in the same basket.
Deja Vu all over again
Last week the Covid 19 spread really started taking it’s toll. And like many businesses, the cruise industry has been especially hard hit. This time it was sort of a double whammy. Because the virus spread was showing up prominently on cruise ships, it was front page news. My website traffic jumped 10X and my hosting company shut me down. And no I’m not mad at them. There had been no reason for me to scale to that level so my hosting package didn’t have a lot of room to expand. The admins were actually great at helping me re-architect my sites. There are a lot of tweaks that you can make that most people never even bother with because they are generally negligible to the average user. But when you are using up all the CPU power on a shared server, it makes a difference.
Rebirth
The good news is that after being dark for 3 days, all of my sites now have twice the speed at no additional cost. The bad news is that no-one is going anywhere any time soon. My wife was actually on one of the last cruise ships to dock before the cruise lines started shutting down. There are still over a dozen ships with sick passengers that are having trouble returning to port. Strangely, we are actually starting to book cruises. They may not actually sail, but we are booking them anyway.
No one knows how long this will last, and with most people cancelling, the cruise lines are offering really good deals. If this virus stuff is over, the ships will sail and we will get paid. If the ship doesn’t sail, we will move the booking to a future date. Then when it does finally sail, we will eventually get paid. It’s not a perfect solution, but you have to look long term to survive these things. We will pivot and ride this out. When other agencies have closed their doors for good, we can pickup new customers.
Resilience While Getting Punched in the Face
In our case, the travel business is not our only business. It’s a nice side business at this point. Between taking a few hits like this and also wanting to diversify, we have gone in other directions as well. I do a lot of consulting for government and coaching for small businesses. Having all your eggs in one basket is dangerous for most businesses. When something like this happens, you basically have two options to stay alive; ride out the storm and hope you have enough capitol, or find a way to pivot. For example, after Soichiro Honda’s plant was bombed during WWII, he would gather spent gas tanks from U.S plane to use as raw materials for his production line. He stayed the course and eventually made a lasting mark on the motorcycle and automotive industry.
During the last global pandemic during 1918-1920, there were more than a few big name companies that figured out how to pivot and grow. Much of the growth in the auto industry during this time can be attributed to the invention of the assembly line by Henry Ford. Standard Oil headed by John Rockefeller also experienced a growth in business during this time. Demand for oil and petroleum-based products in the US and beyond its borders grew dramatically. Many of our current grocery chains like Safeway and Wegman’s were in business in the years prior to 1918. This opened the door to food manufacturers like Groupe Danone (known for Danone yogurt) and ConAgra Foods (known for their Peter Pan peanut butter) to grow during this time period.
On the Horizon
What does the future look like for your business? It may be too early to tell but no matter what, things will be different. Education as we know it will not go back to the way things were. Online classes will become the norm and the cost of education will drop dramatically. Food production and manufacturing will shift to support a more regional economy. Companies and government agencies will finally figure out how to have workers working from home. Tele-medicine will become the norm for triage and not just a novelty.
If you are left scratching your head, just try to visualize what your company and the world will look like in 2025. You may be surprised at the direction. It may not be correct, but these ideas at least move us in the right direction. They say you can drive across the entire country by only seeing about 200 feet in front of you. It’s just a matter of taking the first step. If you would like to explore what your businesses future might look like, let’s setup a free call. It might surprise you.
