I am fundamentally an optimist, but everyone in the world of advertising and marketing technology should realize that we've been on a 14-year bull market tear, and the next couple of years are almost certainly not likely to look like the past decade plus.
It’s not just about inflation, supply chain problems, the burning off of COVID stimulus or the war in Europe. History and math tell us that the extraordinary market expansion that we’ve been experiencing isn’t likely to continue.
As a friend described to me at breakfast this morning, our world is full of executives, employees and entrepreneurs who have been part of companies with strong year-over-year growth, believing they personally had a significant impact on their products’ and companies’ growth -- not realizing it was all market tailwinds. However, as the tailwinds recede, many of them -- and their bosses and investors -- are going to realize their error of perception.
So many in this market have been tripping the light fantastic, oblivious to the fact that it was all about winds beneath their wings.
If I’m right that the winds are likely to die down and intensely swirl as they pick back up, a hard reality may be ahead for many.
I am a big believer in “be prepared.” Yes, I was a former Boy Scout (though in full transparency, I didn’t have the patience or focus to make it past Tenderfoot and a few merit badges). Which means that if I was one of the executives, employees or entrepreneurs who might be particularly dependent on market tailwinds, I would be taking some very concrete steps now to ensure professional survival.
This is the time to focus on costs, cash and market share capture.
Cash is the lifeblood of companies in turbulent times. Make, keep and hoard as much as possible. Costs are what makes cash go away, so reduce and variabilize cost structures wherever possible and appropriate.
Companies with limited cash and unwieldy cost structures will abound, and hopefully some of them are your competitors. The next couple of years will be your chance to attack them with competitive pricing, product innovation, better people and a more sound balance sheet to capture market share.
There’s nothing like watching bewildered sailors who have never been in a luff (caught in dead winds) try to figure out how to get going again.
What do you think? How much of your company’s recent growth has been market tailwinds?