Smooth seas don’t make a good sailor, but the best sailor anticipates a storm even with calm waters and blue skies. This maritime metaphor fits the current market situation perfectly.
I’m sure you’ve heard of red ocean and blue ocean strategies. Red ocean is about upholding the status quo, making do within existing markets and engaging in David versus Goliath battles with industry incumbents.
In post-pandemic times, with looming threats of World War III and global warming, is there even a red ocean anymore?
We’re all swimming in the blue ocean now
The past few years have thrown almost everyone into the blue ocean, regardless of whether we were ready or not.
In the blue ocean, you can’t just keep doing the things that always worked. You have to be bold, innovative, creative, and resilient.
A lot’s been said about the “new normal,” and I think the best way to approach this is to say “to hell with normal.”
Normal is boring. Normal is limiting. Normal is complacent.
Uncertainty is exciting. It’s unlimited. It’s full of surprises and opportunities. It’s risky, but that’s exactly what makes it so enticing.
Tough markets breed resilient business
The dot-com boom came and went, but the market conditions that it created gave us companies like Google, Facebook, Salesforce, and Mailchimp.
The real estate boom came and went, and the resulting market enabled extreme growth for companies like Uber, Airbnb, Slack, and the modern version of Netflix.
These companies solved real problems and offered unique value, but I would argue that they’d never have reached their current scale and status if it weren’t for market downturns.
When cash is cheap, VCs are eager to invest in anything, and customers don’t mind spending extra, it can be difficult to tell whether your solution is a need or a novelty.
As my colleague Bartosz Pranczke wrote, when times are great, “we spend money without scrutiny, hire more people than we need, invest in hopeless ideas, or just indulge in pure speculation.”
But when the above conditions are reversed, suddenly it’s very easy to tell which solutions are essential, and which are just nice-to-haves that people will quickly resign from if they need to protect their wallets.
For business owners, this should be encouraging rather than depressing.
This is the market telling you directly, “we don’t need this, this is just an extra cost waiting to be cut, give us something more valuable!”
There’s no better feedback than that.
Business leaders should be more like Jack White
I’m sure you know Jack White for the legendary musician that he is, but you might not know that he’s a savvy entrepreneur who knows how to handle uncertainty.
Between recording and releasing some of the best albums of the past two decades, he was gradually establishing a small business empire.
Jack registered his own label, Third Man Records, right when the dot-com boom ended in 2001. He was too busy to build it yet, so it wasn’t until 2009, right after the fall of the housing market, that he actually started growing the label.
Then, still as a label owned just by Jack and his two friends, with no shareholders or investors, Third Man Records established a vinyl pressing plant in 2015.
A vinyl pressing plant right when music streaming has taken over the world? Most people would say, “this is madness!” Boy, how wrong they would be.
Jack knew exactly what he was doing. If great artists have one advantage over entrepreneurs, it’s that they’re extremely creative and uncompromising when faced with uncertainty.
Since 2017, Jack’s vinyl pressing plant has become overwhelmed with orders. In March 2022, he released a video plea to the three biggest U.S. labels to establish their own vinyl plants to keep up with the growing demand.
What a legend! The man was successful throughout the dot-com boom, the real estate boom, and the pandemic didn’t even phase him as his company just kept on growing.
Oh, and did I mention that he built his business in Detroit? A city that went bankrupt in 2013 and was basically written off as a dangerous wasteland by many Americans?
Jack is a master of using uncertainty as a driver for growth, and I have a feeling that it’s because he never expected quick wins from his ventures.
Allow me to explain.
Explore, Learn, Pivot, Improvise, Adapt, Repeat
I joined Netguru in 2015 after working with them as a client. Soon after that, I got to take part in one of our most important pivots.
At that time, despite rapid growth, the company was only breaking even. We earned as much as we spent.
We realized that from our clients’ point of view, we were just a run-of-the-mill software agency. Some clients came, the same amount of clients went away.
We were stuck in a hamster wheel.
It became clear that to improve the bottom line, we had to stand back and stop focusing only on the service part of our business.
This situation pushed us to double down on:
- Predictable sales funnel
- New business development
These things seem obvious now, but they weren’t back then. Why would we focus on anything other than finishing the projects that were already coming to us?
Especially considering that these were investments that would potentially bring returns in the long term, with no exciting short-term wins to look towards.
I think this is the crux of the issue with business uncertainty.
Regardless of what we do, as humans and as entrepreneurs, we always want fast, positive results with minimal effort.
It’s just not as fun to roll up your sleeves and shovel the dirt that needs to be shoveled. Most of us would much rather hide the dirt, pretend that it doesn’t exist.
But if you explore stories of successful business leaders, or artists like Jack White, you’ll find that they’re all grade-A dirt shovelers.
They boldly do the things that others don’t want to, they’re not afraid of getting their hands dirty, and they don’t count on quick wins.
They’re not looking for silver bullet strategies or magical business frameworks. They simply focus on the unsexy but impactful work.
It’s not something that you can just up and do. Apart from being bold and knowing what to prioritize, you need another skill to do this – the ability to quickly cut off any unproductive ideas and unrewarding initiatives.
I believe this is critical for overcoming uncertainty.
You keep exploring, you focus on the impactful work, and you don’t get attached to any ideas, initiatives, and projects.
You don’t need to be a genius visionary who knows exactly what the next big thing is, it’s the other way around. Visionaries that find and capitalize on the next big thing are great at letting go of the things that don’t work.
They don’t fall prey to sunk cost bias. They’re ruthless about letting go of things that aren’t adding value, and this gives them the time they need to do the important things properly.
Whether through measurable data or opinion-based insights, they start evaluating their investments early, and keep evaluating them on a regular basis.
This type of approach is what we call digital acceleration, but similar principles work across the board.
For example, great investors also operate like this. Their success isn’t based on how well they can see the future.
Their success comes from the fact that they know when to cut a loss short, and they do so without hesitation. This takes away the uncertainty and gives them the focus and clarity needed to capture new opportunities.
Over to you
Thank you for reading, I hope that you found this story useful.
How do you deal with uncertainty? Do you find that the above is true, or are your experiences and observations completely different?
Let’s exchange ideas, I’m always eager to learn – you can find me on LinkedIn.