Friday, January 2, 2009

Fear, uncertainty and doubt in 2009

Over the last few weeks I've seen a steady stream of 2009 predictions, myself included. The problem with these predictions is they appear to be more geared toward that of what might be pleasing to imagine instead of appearing to use any sort of rationality. Sure if you're selling a widget in 2009 then it makes sense to publicly say it will certainly be the year that your widget becomes the next big thing. In fairness, studies have consistently shown that holding all else equal, predicting positive outcomes is far more likely than negative outcomes (also referred to as the Valence effect) which I just call wishful thinking.

I thought I'd take a more pragmatic view of 2009. So let's look at the obvious aspects of our world as we enter 2009. Financial crisis, food crisis, global climate change crisis, terrorists, mideast crisis, and the list goes on. There appears to be a particular focus at the present time on any concepts involving a crisis. In Marxist theory, a crisis refers to the sharp transition to a recession. Which I think we can all agree is what happened in 2008. For me a crisis represents a crucial stage or turning point in the course of something much bigger. Which brings the question of what comes next?

So what does all this doom and gloom mean? I think it means that for those who aren't spending their time spreading fear, uncertainty and doubt, 2009 would appear to be the perfect time to hunker down and build, build and build. Your products, your team, your company.

In my conversation with Vijay Manwani founder of Bladelogic, he said that one of the best things to happen to Bladelogic was closing their first round of funding just before Sept 11 2001. He said the downturn meant they could recruit some the best people, with little or no competition from other startups. In effect the down turn provided a economic void that enabled them to emerge at the other end far more successfully then if they had formed during the peak of a economic cycle.

A recent article in wired magazine titled "How Economic Turmoil Breeds Innovation" also sheds some light on this subject. The article outlines; "The most memorable crucible in modern history is the Great Depression. During that era, several firms made huge bets that changed their fortunes and those of the country: Du Pont told one of its star scientists, Wallace Carothers, to set aside basic research and pursue potentially profitable innovation. What he came up with was nylon, the first synthetic fabric, revolutionizing the way Americans parachuted, carpeted, and panty-hosed. As IBM's rivals cut R&D, founder Thomas Watson built a new research center. Douglas Aircraft debuted the DC-3, which within four years was carrying 90 percent of commercial airline passengers. A slew of competing inventors created television."

So who knows, maybe 2009 is the year we see the next IBM or Google emerge?

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