Surviving and Thriving..

Found this over at Dot.Life.com. It's aimed at Silicon Valley Entrepreneurs, but applies to Printers, and other businesses just as well.

John Doerr came armed with a list of 10 top things that chief execs should do to help them come out the other end of this downturn.

Mr Doerr is with the famed VC company Kleiner Perkins Caufield & Byers and when he speaks, people listen. That's because his early investments in companies like Google, Amazon, Intuit, Compaq, Sun and Symantec have earned him some serious kudos."

So here are his tips...

1. Act now. Act with speed. Raise money. Get a loan. Focus, cut or sell.

2. Protect the vital core of the company. Use a scalpel instead of an axe. Be surgical.

3. Make sure you have 18 months or more of cash on a conservative revenue forecast.

4. Defer any facility expansions. Don't spend money on tech infrastructure, such as new computers or software if you don't need it. Re-evaluate your R&D priorities.

5. Renegotiate any contracts that you can. Everything is negotiable.

6. Everyone in the organisation should be selling, from the receptionists to the engineers. It's a noble profession.

7. Offer people equity instead of cash as bonuses. You can do this with outside vendors as well.

8. Pay attention to where your cash is. Treasuries, for example, are more secure than money market funds.

9. For your revenue plan, pay attention to leading indicators.

10. Over-communicate with everyone: employees, investors, key customers. Let them know your resolve and don't sugar coat things.

Print and Starbucks

In a previous post I argued that a good way to look at printing is in traditional terms of producers and retailers. Another way to look at is a somewhat different business model that combines some aspects of production and retail.

My favorite example of this model is Starbucks. To see how this applies to Print, consider the following excerpts from a blog at Harvard Business Publishing.

Why Traditional Recession Tactics Are Doomed To Fail This Time
Posted by Umair Haque on October 21, 2008 1:11 PM

How should boardrooms respond to the macro crisis? Is it just a case of recession-as-usual: budget-paring, personnel-slashing, and portfolio-trimming?

Not a chance. The tactics of recession-as-usual are neither necessary nor sufficient for firms to weather the global economic superstorm - because it's no ordinary squall, but a once-in-a-lifetime gale ripping up the very foundations of the global economic order. Rather, the macro crisis requires decision makers to confront fundamental transformation on three levels.

The first and simplest level is a change in global patterns of savings, investment, and consumption. For too long, the poor have financed the rich. China and other emerging markets have lent to the US so Americans could buy Hummers, McMansions, and Frappuccinos. But this never made sense -- it was deeply unsustainable; the macroeconomic equivalent of a giant planetary fossil fuel engine. The days of export-led growth -- and it's flipside, force-fed consumption -- are numbered.

Strategists in the boardroom face a new global macroeconomic picture. Overconsumption in developed countries must slow sharply, and capital must be redirected to long-run investment, especially in public goods. Conversely, emerging markets must shift from financing consumption in developed countries, and begin investing in the basic institutions of a vital microeconomic environment and power long-run growth.

What does that mean, concretely? Let's take a simple example. If Starbucks wants to grow in the States via new stores and new products, its corporate strategy must support the clear macroeconomic need to shift overconsumption to long-run investment. That means relying less on Vivannos, and more on, for example, Starbucks as a platform for communities to build and invest in local resources. Conversely, if Starbucks wants to grow in developing countries, it cannot just rely on a handful of new stores serving fatter-margined deluxe water to a new global bourgeoisie -- rather, to make growth sustainable, Starbucks must reinforce and support fair trade, responsible relationships, and account not just to count profits -- but to gain insight into long-run value created.

If ABC Printing wants to grow via new products, its strategy must support the clear macroeconomic need to shift overconsumption to long-run investment. That means relying less on advertisers and direct mail, and more on, for example, ABC Printing as a platform for communities to build and invest in local resources. Given that one of the best ways to build local resources depends on vibrant local conversations and that Print is still the best way to facilitate public conversation, it's a real opportunity.

Let's go back to our Starbucks example. Starbucks tried to grow by selling us more junk we don't need -- music, mugs, and mouse pads. That was orthodox, textbook, industrial-era strategy: grow by seizing share in adjacent markets. But it's also defunct in a world where we don't need more useless junk.

What do we need in the 21st century -- not just as brain-dead consumers, but as global citizens? We need opportunities to grow and amplify our capabilities. For Starbucks, that might mean, instead of hawking mugs and chocolates, training baristas to teach classes in coffee-making, letting communities use Starbucks as a venue for local government, or, at the limit, training local suppliers from developing countries as Baristas in developed ones. How cool would that be? Very.

Let's go back to ABC Printing. ABC tried to grow by selling us more junk we don't need -- more color, faster color, bells and whistles. That was orthodox, textbook, industrial-era strategy: grow by seizing share in adjacent markets. But it's also defunct in a world where we don't need more useless junk.

What do we need in the 21st century -- not just as brain-dead consumers, but as global citizens? We need opportunities to grow and amplify our capabilities. For ABC Printing that might mean, instead of hawking more, faster cheaper color, training pre press people to teach classes in file prep, letting communities use ABC Printing as a venue for local government, or, non profit organizations. How cool would that be? Very.

On the third, and deepest, level, strategists must rediscover entirely new sources of advantage as old ones fade and decay. Once we rediscover how to create value, we must learn how to sustain and maintain it. But the sources of advantage we teach in business schools and boardrooms alike were built for an industrial-era -- not a hyperconnected, hypercomplex 21st century. For example, brands ain't what they used to be -- and, as the investment banks just showed us, neither is scale, proprietary knowledge, or top-notch relationships.

Tomorrow's sources of advantage aren't like yesterday's. They're not built on being able to exploit, dominate, or coerce more strongly than others -- they don't result from being harder, better, faster, stronger. They're about exactly the opposite: being softer, better able to fail, having the ability to be slower, gaining the capacity for tolerance and difference. Ultimately, they are about a true advantage -- one that accrues not just to the corporation, at the expense of people, society, or the environment; but one that accrues to all.

Let's go back to our Starbucks example. If Starbucks wants to survive the 21st century, it must get radically experimental, learn to tap the power of network effects, shift to becoming resilient, develop and live a sense of purpose, or learn to occupy the creative high ground. It is only through new economic avenues like those that Starbucks can make sure its own advantage isn't just the flipside of Detroit's, Dar es Salaam, or Dhaka's disadvantage -- that it's not just, like the investment banks, building an economic house of cards.

Let's go back to our ABC Printing Company example. If ABC Printing wants to thrive in the 21st century, it must get radically experimental, learn to tap the power of network effects, shift to becoming resilient, develop and live a sense of purpose, or learn to occupy the creative high ground.

That's incredibly difficult -- because industrial era DNA is built to power a nakedly competitive advantage; one that's deliberately blind to being unfair, unsustainable, or flat-out imaginary.

There's a different way to say that. Discovering new sources of advantage depends on new DNA -- on building new kinds of institutions with entirely new capacities. Because, at root -- and as we'll discuss at length shortly -- the macro crisis isn't really a financial crisis, an economic crisis, a liquidity crisis, or a solvency crisis. It's an institutional crisis: the economic institutions of capitalism are in shock.

And though it's a scary, frustrating time -- the cool part is this: it's up to us to reimagine, reconceive, and reinvent them. We get to rethink the institutions of capitalism for a new century.

What could be cooler than that?

Discovering new sources of advantage depends on new DNA -- on building on new kinds of printing manufacturing and sales with new capacities. Because, at root -- and as we'll discuss at length shortly -- the macro crisis isn't really a financial crisis, an economic crisis, a liquidity crisis, or a solvency crisis. It's an institutional crisis: the economic institutions of Print delivery are in shock.

The old notions of "trade secrets," "owning the customer relationship" and rejecting anything that is "not built here" are over. The new notions are open shared information, helping the customer make the best decisions for them and finding the right capability and get it to the right person at the right time (which is usually pretty close to now.)

Advertising is the contracting market

I've argued for a while that new opportunities for Print are not in the world of advertising in the service of selling stuff. The conventional wisdom is that the crux of the problem is the internet and multi-media. Another take is that advertising to buy stuff is no longer sustainable. When things aren't sustainable, sooner or later they change or disappear.

The following is from a post at Harvard Business Publishing.

How Marketing The American Dream Caused Our Economic Crisis
But underpinning the collapse of the housing bubble is a demand-side problem - the American Dream - that has been hijacked in countless political speeches from an embodiment of America's core values into a crass appeal to materialism and easy gratification. . . .

Right wing politicians touting the American Dream consistently advocate lower taxes.. . .
Left wing politicians are equally guilty of framing the American Dream in material terms. . .
Politicians on both sides have been equally culpable in defining the American Dream in material terms, in encouraging Americans to live beyond their means in its pursuit, and then putting in place policies that enable them to do so. Hardly any politician has had the courage to call for restraint.

Americans need a refresher course on the American dream. The Constitution speaks of life, liberty and the pursuit of happiness, not an automatic chicken in every pot. The American Dream embraced by immigrants over the past two centuries has been the opportunity to set one's own goals and pursue them honestly to the limits of one's ambition and ability. Too many Americans have been expressing the Dream through the acquisition of stuff. Others see the Dream as raising a family in a land that delivers Franklin Roosevelt's (and Norman Rockwell's) four freedoms. Still others dream of their children accessing the highest possible level of education, living healthy lives, being good citizens in their communities.

So... if Obama wins and he does what says, it makes sense to believe that there will be new opportunities in education, health and government. Actors in those spaces have to speak to everyone. When you have to speak to everyone, Print is not a "nice to have," it is a "must have."

Sales or distribution? Wholesale or Retail?

Different players in the print business look at it from different points of view. It's the blind men and the elephant story. If you're trying to earn a living from Print, the only really important point of view is the end user. Only the end user brings new money into the production network. Everything else is just an expense.

At Graph Expo print manufacturers are the end user. But in the real business of print, they are just an expense. The money they bring to the table is earned from the customer at the end of the process. If there are lots of customers, they have lots of money to spend. If not, then not.

The focus at Graph Expo is how to manufacture print - better, faster and cheaper. Every year the vendors showcase great new tools to improve manufacturing processes. Every year successful printers can find the right tools for them.

But further improvements in manufacturing only have an acceptable time to value when there is not enough capacity. Under capacity - too much work, not enough time - is a high class problem. High class problems are amenable to better manufacturing solutions.

Over capacity - not enough work - can become a question of survival.

So...the question at hand is "how to get more work?" That means more sales. Which is just another way of saying "increase the efficacy of the customer acquisition process."

When Print was the default method of communication customer acquisition was an ill defined problem. What worked in the past was still working. Sales were often accomplished with a couple of stars and commonly accepted pricing.

Another approach was the "trade printer." Those firms cherished their place as manufacturers. They understood that manufacturers had to deliver good enough quality, in acceptable time frames at low enough prices. They left the sales process to sales experts who spent 100% of their time talking to customers.

When work started slowing down, some "trade printers" thought the best way to capture extra margin was to "sell direct." It was just common sense. But what many overlooked was an appreciation of the mechanisms of the sales process. At the time it seemed so intuitive that the idea of standards based process was not necessary. Some "direct" printers started doing more work for the trade. But it was hard to adapt to the rules of good enough, fast enough, cheap enough.

Meanwhile, new words are emerging to describe the emerging business of print. The overall business model is well established: manufacturers and distributors. It's not different from manufacturing clothes, food products, lighting fixtures, or copiers or forms.

Being a manufacturer or a distributor doesn't sound as good as being a solutions provider or a marketing partner. But given what a bad rep salespeople and printing brokers have always had, it might actually be a step up.

The good news is that there is a deep and wide knowledge base about what a "distributor" needs to do. It's pretty much the same thing as running a Starbucks or a TJ Maxx.

Just got this from a press release at GAM:

Graph Expo opened yesterday with brisk attendance and vendors announce a steady stream of equipment sales, despite tightening credit markets. Trade printer 4over, Inc. took the occasion to announce it was purchasing six Komori Lithrone presses for three new plants it will build in Florida, New Jersey and Texas. When the massive expansion is completed, the Glendale, CA-based trade printer, annual sales of $80 million, will operate five locations allowing it to ship to 90% of the U.S. market via two-day ground service.

I guess they haven't heard that Print is dead.

To see what this looks like from the distributors point of view check out the Print Services Distribution Association. They just completed their trade show in Baltimore.

The Print Solutions Conference & Expo, the only national show for the trade, has long been understood to be the premier show in the print distribution industry, designed to unveil and demonstrate new and exciting products, services and technology. Top executives and decision makers, along with their sales managers, see the Print Solutions Conference & Expo as the one show during the year where they can learn about new sales channels, new products, and network with other like-minded individuals.

A description of PSDA from their website:

Our association is comprised of the largest network of print distributors and trade printers, collectively aiding in building better partnerships to advance individual businesses as well as the industry as a whole. Print distributors can easily connect with like minded business executives through an array of networking tools that PSDA has designed to facilitate business-to-business communication. While our events prove to offer the most exciting and beneficial personal networking experiences, our online databases, directories, listervs, and regionalization program are second to none.

Similarly, PSDA’s membership base of trade printers gives print distributors immediate access to printers who specifically sell through the trade. This network of prospective partners, allows our distributors to quickly and easily place the most common to the most discriminate order, build printer contacts around the world, expand the services they offer their clients, and build lasting relationships with some of the industry’s top printers.