We are clearly in a recession that will test many startups in Silicon Valley and the rest of the United States. Those with determination and a willingness to embrace creative improvisation are more likely to survive.
Startups Need Sisu and Creative Improvisation To Survive Recession
“Innovation is the specific tool of entrepreneurs,
the means by which they exploit change as an opportunity
for a different business or a different service.”
Peter Drucker “Innovation and Entrepreneurship”
My uncle John Murphy was a doctor in a Mobile Army Surgical Hospital (MASH) unit in Korea. He only talked about his experiences twice that I can recall and his memories of events were of one long stress filled tour of duty. He had a family and was in the reserve when he was called up a few months before his WW2 deferment obligations would have expired. He chose to go to a MASH instead of a hospital in Japan or Seoul because he earned points faster and would be home much much sooner. Although the units were supposed to be “behind the lines” they frequently came under sniper fire and had to continue to retreat as the UN front lines pulled back in the face of the Chinese onslaught after the Yalu river was crossed.
And yet it was in the MASH units in Korea that several new surgical techniques were pioneered. Not because it was by any means an ideal environment, but because the alternative was the death of the injured soldier before they could be airlifted to a traditional hospital. Everyone was out of their comfort zone but the needs and the likely alternatives were clear.
I don’t think the current recession will prove as personally harrowing but I do think we are going to see the end of many firms and the radical re-invention of others that choose to innovate and survive. If your current business model isn’t working, keep experimenting until it does.
I walked by a newspaper rack today and was surprised to see “Silicon Valley Jobless Rate Hits 10 Percent.” A year ago it was five percent. The Sacramento Bee has an interesting animation on the geographical distribution of unemployment in California: many counties are in the teens and some in the twenties. Unlike the dotcom crash the economic pain extends well out of Silicon Valley.
- Focus on reducing existing or easily identified cost streams for your prospects.
- For software and service firms figure out if there is a deal available at any price: if the alternative is idleness take the deal.
- This may last at least another year, find ways to persist. Cultivate sisu.
We did some work with a group of Finnish entrepreneurs a few years ago who were ultimately acquired but first spent a while having to persist in the face of modest market acceptance of their technology. They talked about the need for sisu, which is a Finnish word for determination and endurance. It’s what you need to survive if you need to live on the ice for a month and eat lichen. It’s not courage as much as determination to survive in very difficult situations.
More on Sisu
- The Finnish Line: “In the five years since my last visit I’d almost forgotten about sisu, a Finnish word for something that’s hard to translate. The equivalent in English might be “determination.” Sisu, however, implies a trait much deeper in the Finnish character, so deep, in fact, that it’s best observed in the dead of winter, when added reserves are needed just to make it from one five-hour day to the next.”
- Silicon Vikings “The Silicon Vikings is a collaborative business networking organization for the technology sector. Silicon Vikings operates in the intersecting worlds of Silicon Valley and the Nordic Region (Denmark, Finland, Norway, Iceland, and Sweden) to help members succeed in their professional and personal endeavors. Silicon Vikings accomplishes this by providing lunches, mixers and events that are of professional and personal value, and by effectively communicating valuable information of interest to its members.