When central bankers (such as the Governor of the Bank of England) announce the demise of 'the nice economy', and lesser ranking economists and other pundits sound the same doleful note, anybody can be forgiven for looking back nostalgically at the days when venture capitalists would sound a far more positive note, talking up opportunity as a business strategy.
Take this quote: "We're seeing an enormous number of business plans from people who have ideas… And we're also looking for green ventures and using Google and other modern tools to find innovators. So it's as good a time to invest as we've ever seen."
Interestingly, those words were not said during the recent height of the nice economy, but in the present nasty time. The statement was made by Bill Joy, a venture capitalist with the legendary Silicon Valley firm of Kleiner Perkins Caulfield & Byers.
Business Week has reported that Joy's outfit is backing up his words with money, in sectors like mobile computing and the above-mentioned green economy.
One great paradox of the modern economy is embodied right there. When the overall picture is dark, there exist an increasing number of chances for generating bright new success. Yes, credit might be harder to find, and debt costlier to service. But the fact remains that excellent opportunities to acquire and invest capital still abound.
It should always be borne in mind that there is always an opportunity – a new technology, a new business strategy, a new product line. Search for anything that will cause the market to change or exploit a changing market.
Also be deadly serious about studying rival opportunities. Make sure you don't indulge yourself in wishful thinking. It is all too easy to knock competitors and comfort yourself with the notion that the rival's opportunistic novelty will not work or survive. To be paranoid about the threat and worry about its strengths rather than rejoice in its weaknesses is a far more advisable approach.
Be brave and bold, taking a tip from the 'vultures' flying over the US economy and suddenly swooping to purchase assets and make big bets on Wall Street.
Philip A. Falcone, one such bird, profited to the tune of $11billion last year by exploiting the devastating fall of the subprime markets. Business Week quotes a Falcone ally as saying: "He will look at anything… If it's cheap, he'll buy it."
While focusing on bargains, the vulture doesn't concern itself with the overall climate which created those bargains. If he takes the 'safety first' business strategy, the manager will be automatically drawn to rule out the many opportunities that in reality (such as buying cheap assets) might be less of a risk than trying to stay put.
There is a famed opportunist whose firm lived through the previous financial turmoil when the dot.com bubble burst. He says: "What I told our company was that we were just going to invest our way through the downturn, that we weren't going to lay off people. And we were going to keep funding."
The opportunist in question is Apple's Steve Jobs, who opted to up R&D spending so as to come out ahead when the downturn ended. "And that's exactly what we did. And it worked. And that's exactly what we'll do this time."
Opportunity always knocks. And adversity is the mother of opportunity.
