Economic Downturns Are Good For Business

A few years ago, at the end of Infinity Softworks’ second act as an education company, we decided to raise a round of funding. To make a long story short, I concluded early in the process that that was not possible and abandoned the idea. But two years later, as I watch the news wires for funding deals, a whole bunch of education companies have raised money. While the timing didn’t work out for Infinity Softworks’ education plans, here’s hoping it does for FastFigures and our re-focus on business customers.

Well, that left me thinking. Some of our biggest markets for FastFigures include real estate, financial and investment services. Could we have better timing? Let’s see. A busted real estate bubble, the banking system struggling, and Dow Jones sinking like a lead balloon… great time to sell to those folks!

But the truth is it is a great time to start this business. These problems won’t last forever, and when these problems fade then we will be in a great position to grow with our customers. When everything was easy — when a house sold in a day — no Realtor needed to care about educating their customers about mortgages. The only expertise they needed was to get the offer in fast. Now, with Realtors fighting over a small collection of buyers, education and experience will be the key.

Seth Godin wrote in his post “Looking For a Reason To Hide” a very interesting piece of information: a large chunk of the Inc 500’s fastest growing companies were born in the days following 9/11. From the darkest moments springs new life. It’s true with the tech companies I have watched all my life, too. Apple, Microsoft, Oracle, Google, just to name a few, all born in the dark days of recession.

So we start slow, we put the pieces in place, we learn and listen and take action on that. And then when the market shifts, if we’ve done a good job of learning and listening, then we will be ready and waiting to grow!

Company Foundations: Money, Vision and Timing

I have been thinking a lot about the keys to success for a company. In short order, they are money, strategic vision, and timing. If those three aren’t in place, then nothing else the company does will be successful. What I mean is without these three, excellent execution will mean nothing. Let me explain each.

Money

A company is only as good as it has money in the bank to strategize and execute. This has been Infinity Softworks’ problem the past few years. We never had enough money in the bank to give us enough time to build a comprehensive strategy and execute to it.

In 2001 and 2002, we raised $550,000 but because of the economic downturn at the time money was very hard to come by and we raised it in drips and drabs. The mistake I made was we used the money to meet current obligations rather than executing to a comprehensive plan. At least until the end, when we raised a large chunk all at one time and we used that chunk to build our education plan and go after it. In that case it didn’t work out, but that was because of timing not money.

Don’t take this the wrong way. I’m not saying how much money needs to be raised; I am saying that money gives a company time to plan and execute. When Infinity Softworks started in 1997, we had only a few thousand dollars to build the company with, not many dollars (particularly for the kinds of money being tossed around in those days). But we had time. We were are all young and had very low overhead. This gave us the time we needed to bring out our first products and start to generate cash.

As mentioned, money has been an issue the past few years. We took part-time jobs working for others so we could continue to build FastFigures. Now, we are in the process of completing a small round of funding. It will give us the ability to focus on building our strategy and executing to it effectively.

Strategic Vision

It is imperative that a company understand what it is doing and what it is aiming for. Customers, partners and employees all need to understand it. A vision for what the company can be makes everyone excited to work with you. I have to admit that Infinity Softworks was aimless for a while. I had a better strategic vision in 1998-2000 (the next generation of financial calculators) than I had in 2001-2002 when we raised money. The vision became muddied.

Finally in 2003, we focused on revolutionizing math education (focusing our class time on key concepts instead of keystrokes). It brought partners out of the woodwork. Customers understood it. And the company’s employees all had common purpose. We knew what we needed to do and, importantly, we knew what we should not do. When it fell apart in 2006 (see Timing below), we were aimless again for a couple of years while the vision around FastFigures formulated. Now we are back on track. I can see excitement in the emails and conversations with beta and other customers, and see potential partners becoming excited about it.

Timing

With all the money in the world and the perfect strategy, none of it will matter without the right timing. This was the doom for our education business. The timing was wrong. Monies for technology in the classroom were drying up at the same time that Palm was struggling and decided to get out of the handheld business. We tried to switch course, to move to the web, but we took with the move the same strategic vision. It didn’t fit with how technology was used in the classroom. So we struggled to find partners and customers who bought into our vision. It just didn’t match the market.

The timing has to be right. I was too early and customers weren’t ready to hear my message. If I was too late, then my customers would have found a good enough solution already.

I think our timing is right for FastFigures. From a technical perspective the confluence of mobile computing and web-based computing are making a lot of things possible that just weren’t even two or three years ago. Fine, as my customers have pounded into me, it doesn’t mean web-based apps running on smartphones. But it does mean an improved method for sharing data and interacting between the two.

From a business perspective the economic meltdown has made professionals the world over have to understand the numbers before doing a deal or giving an answer, something missing over the past few years. Are we too early? I hope not but I can only know this one in retrospect.