It taught me a few things about building resilient B2B businesses.
In March 2013 the economy of Cyprus imploded, wiping out 1000s of businesses; drastically changing lives; and teaching heavy lessons along the way.
A little bit of backstory.
Let me take a moment to paint a picture of what my business life looked like in March 2013.
Almost a decade earlier, whilst struggling to be taken seriously as a 15 year old ‘webmaster’, I’d made a promise to myself:
“By 25 you have to retire, take any money you have and find other young entrepreneurs to invest in. Show them the support and guidance you wished you had received.”
A little naive? Probably. But after a few acquisition offers for the viral-technology I’d built to market the little online magazine I was running, I’d taken the decision to instead spin out a company that would build bespoke online campaigns for businesses, and have it headquartered in the almost-always-sunny island of Cyprus, where I was based.
By March of 2013, I was finally 25 and actively working on expanding our gamified marketing services into the UK market.
I figured a little bit more revenue could help me invest in even more young entrepreneurs. What could go wrong?
March 15th. That’s what!
That Friday kicked off an unbelievable 4 weeks of economic chaos, as the islands’ economy completely melted down, following a series of economic dominoes tumbling down across Europe.
Those 4 weeks featured everything from banks locking down every single account, to some of the strictest capital controls being implemented. There were even talks of unprecedented haircuts (or bail-in’s) of all account holders’ funds island-wide. Last minute negotiations lead to one bank being wound down, whilst subsequently down-grading the ratings of all the other local banks.
But the biggest victims were the 1,000s of businesses who had to choose between going bust or letting go almost all of their talented staff.
We operated through a partnership model, allowing Ad Agencies to resell our whitelabel software and services to their clients. The meltdown repeatedly kicked our business model in the shins.
And it hurt. It hurt, a lot!
However, the collapse led me onto some other more impactful projects and into a community of entrepreneurship-enablers that I am very proud to be a part of.
Below are the 3 lessons (and a bonus tip re: live TV) that I share on the 5th anniversary of the collapse, with the hope that they may help you or someone you know on your entrepreneurial adventures.
#1 — Is what you’re doing impactful or meaningful enough for you?
ie Would your business still excite or inspire you whilst the (theoretical) walls burned down around you?
This was one of the biggest personal take-aways for me. From seeing everything I’d worked so hard for pretty much dry up over night I had to make a call about wether or not the business had indeed, truly fallen apart.
Could the business have survived by moving into new markets? Aggressively chasing up unpaid invoices? Putting in a lot of sweat and little prayer?
But did I really want to be in the campaign-on-demand business anymore?
I’d gotten into the sector due to my love for building creative solutions to interesting business challenges. The nature of the ad-agency business model, however, meant that sometimes we landed up building things that made no marketing or business sense, other than for the client to say ‘we have also built a game on our Facebook page’.
I think I’d also heard “but we’ve already pitched it to the client and they’re happy to proceed, the deadline is in X weeks to go live” one too many times.
The very next week after the meltdown I launched an experimental project to help out the suddenly-unemployed creative folks in Cyprus. That led me to founding included.co a year and a half later.
And now I get to build a company that helps 1000s of growing businesses across the globe find the solutions they need to launch or grow. I couldn’t be more inspired, as I now get to fulfil 16 year old Hector’s promise by supporting other entrepreneurs every day, just in a slightly different way.
#2— Is what you’re doing impactful enough for your clients?
Most of our campaigns created vast brand exposure and ROI for both our clients and our partners.
Whilst that’s awesome, marketing is one of the first things businesses turn off in a crisis, regardless of how bad of an idea that is for most cases.
Having spent a little too long in the sun in Cyprus, I had always thought “Eh, that’s the way the world works. What to do.”
However, just like people need to put food on their tables, there are specific products or services that a business cannot afford to turn off. They simply create too much value on a daily, weekly or monthly basis to warrant switching them off.
Whatever pain-point your business solves, make sure you’ve solved it so well that the idea of turning your solution off would feel like they’d be choosing to allow their business to go hungry.
I’m in no way saying you should aim to lock-in your clients in such a way as to create resentment about them having to pay you, especially at the detriment of their business or personal goals. Quite the opposite.
Create undeniable value, often.
#3 — Avoid credit if you’re offering a time-sensitive service.
Due to our reseller-like model, our intermediaries (the ad agencies) usually requested 60–90 day credit for their purchases. And we naively obliged.
High efficiency meant that sometimes campaigns were spec’d, built, proofed, published and completed long before payment was expected.
When a business has no access to its own funds, and employees or other critical expenses need to be paid urgently; can you guess who doesn’t get paid first?
Yeap, that’s right! The folks who’ve already fulfilled their obligations get paid last. If at all.
Bonus — when doing live-TV interviews, expect the unexpected.
Through a recommendation of a friend, to her friend at one of the largest TV networks on the planet, I landed up being one of the first to be interviewed live on the whole meltdown on their channel.
Because my business was based in Cyprus, and we were running a popular live-blog from the ground, I was invited to come in and speak about the possible repercussions of the proposed bail-ins for local businesses. It was an exciting experience and one dived at.
However, 30 seconds before I went live on their morning show, the news broke that the Cypriot government had rejected the proposed bail-in offer.
A little voice whispered into my ear through the receiver, “Hector, we’ve had some developments, the Government has rejected the bailout, so we’re going to focus on that. Ok? And we’re live in 3.. 2.. 1..”.
I believe they asked me something about what political implications this rejection of terms would have. Maybe. I’m not sure, because my brain still blacks out most of that session. Since then I’ve tried training myself to be better on my feet, and to better handle questions coming out of left-field.
It did make me appreciate this pro-tip from Zootopia:
So whatever you choose to do, make sure that there’s something in it for you; it creates consistent value for your clients; and be wary about long-term credit.
How was this post? Useful or useless? Confusing or well written? Let me know in a comment below or via Twitter.