"Sky isn't falling" blogger says

Steven Hodson, over at the Inquistr blog, says “the sky isn’t falling” and “What do we get instead? We get people like Robert Scoble who have for the last few days done nothing more than highlight everything bad going on.”

Ahh, yes, ye olde blame the messenger post.

See, all week long I’ve been saying we’re in a death spiral. They argued with me last weekend and on Monday before the market had its worst week ever. Ever.

They are still fighting with me after I’ve been talking with CEOs, investors, normal people, and reading thousands of feeds and watching CNBC nearly around the clock.

Funny that even the experts are wrong. CNBC’s Fast Money show has been calling for the market to go up on every show this week. It, instead, went down down down.

I prefer to tell people the truth as I’m hearing it, even if that truth is tough and nasty.

That said, if you’re watching my posts here I’m looking at this like a hurricane moving across our economy.

It hit New York three weeks ago. Then it moved onto other parts of our economy (auto industry is getting hammered right now, for instance).

My radar screen shows its full effects have not yet been felt in the tech industry for a variety of reasons. But it is headed here.

Now, what happens in a storm? Some trees topple. Some stand tall.

But right now to try to smile and say everything is going great and you should be optimistic is wrong. Sorry, it’s wrong.

It’s time to take steps to make sure your businesses are strong and can withstand the storm. If they aren’t strong, it’s time to fix that and fix that fast.

As the storm passes over us in the next quarter (financial results are still to come, so there’s still a couple of bad quarters to come, particularly with consumer electronics companies and retailers as they get a full sense of how bad the Christmas buying season will be) we’ll certainly see winners and losers.

Last weekend I was really freaked out. I was right to be freaked out.

Today I’m a lot more calm and am “working the problem.”

So, Steven is right too. The truth is often in between two extremes. But I won’t apologize for losing my head on Monday. If you had listened to the optimists and had bought on Monday you would have lost another 18% of your wealth. If you had listened to me and sold you’d have a lot more to buy back in or to use to keep paying your bills over the next year or two.

It’s why I keep asking questions here, too. I don’t have all the answers. Heck, I don’t have many answers at all. But the neat thing about this is you can share your opinions and views of what’s going on and give us ideas for how to ride out the coming storm.

Post a URL if you have some good ones, we’ll all appreciate it.

The customers are gone, now what? Tent sale!

Google Tents at Where Camp

My brother’s bar has gone from $15,000 a week in sales to $9,000. Almost every business I’ve been talking to has seen drops. Some less, some more. But it’s like a new kind of bomb just hit our economy: one that didn’t do anything except remove customers from our streets.

So, what do you do? When I used to help run a store in the late 1980s in Silicon Valley I saw the same thing happen. What did we do? We held a tent sale. Sent out mail to all of our customers. Made handmade signs that we put up along Saratoga Ave. Put a big tent outside. Moved all of our inventory into the sidewalk. Lowered our prices. And sales went up that weekend quite a bit.

See, the customers are there, they just are hiding in the shadows preparing for the worst and trying to avoid getting killed too as this big storm moves across our economy.

It’s going to be tough to think “outside the box” the next couple of weeks. The shock of this economy and watching the stock market go down, down, down is too fresh and too nasty.

But coming soon are lots of conferences that are still doing well. I remember in 2000 when the bust started happening that we still had thousands of attendees at our conferences. It was the sponsors that disappeared first. That gives you an opportunity to hold a tent sale out in the street.

Yesterday I was talking with Gary Vaynerchuk of Wine Library TV. He’s already thinking along those lines for visits to CES and SXSW — doing something low cost that shakes out customers. He knows attendance is going to be down, people will be depressed, budgets are already getting slashed, etc. So, we’re all putting on our thinking cap about how to do something low cost that’s metaphorically like the tent sale that gets us through the tough times by encouraging customers to come out of their holes and visit our businesses.

Got any ideas?

Hey, I have two of those Google tents. Maybe we can meet on the beach by the Half Moon Bay Ritz on Tuesday night, setup two of these tents, share some cheap wine and cheeze, and brainstorm about how to get customers over the next couple of months? I’ll meet you at the Ritz Fire Ring at 6 p.m. (on the Ocean Side) on Tuesday night and we’ll do just that.

The startup squeeze

Startups that don’t have revenues or a business model, like Seesmic or Twitter, are going to get squeezed big time in the next six months. Already we’ve seen how Seesmic responded to that coming squeeze yesterday. It got skinnier to make the squeeze easier to take. They will be joined over the next month by tons of other startups who will get skinny to prepare for 2009.

But what at the other end of the scale? What about small companies that have millions in revenues and are very successful? I’m hearing they are getting squeezed too. I can’t reveal the names yet, but I’ve been talking with companies who have millions in monthly revenues who can’t get credit or funding to expand and they are seeing customers disappearing from the marketplace at the same time, so they are getting squeezed. What do they do? They are turning away from capital markets and turning toward bigger companies who have the cash to buy them.

Expect to see a bunch of mergers and acquisitions over the next three months (you’ll see some in the next few weeks, again, I have several sources in big companies who’ve told me what they are seeing — there are bidding wars breaking out inside big companies to gobble up some of these smaller companies that will bring needed revenues to big companies’ bottom lines. Those revenues will be how the bigger companies pull their stocks out of the discount bins over the next few quarters).

CEOs: I’d love to hear about what kinds of pressures you’re under right now, even if you’re successful with millions in sales every month, and how you are responding to those pressures.