Myth buster- Macro factors are not the culprit in your company's failure
Your company is not Lindy compatible
Social media is not reality. Professional social media, even less so.
In fact, ninety-ish percent of the economy is made of brick-and-mortar, unknown, old-school companies.
They sell tires.
They sell leather.
They sell bread.
They sell milk.
They sell that one type of heavy machinery needed for some fruit crops in some specific land at the edge of the world.
They sell all those things that are around you when you shut down your computer. Those companies, at least the most profitable among them, and those ones you will likely do business with, are Lindy-compatible.
Per Wikipedia :
The Lindy effect (also known as Lindy's Law) is a theorized phenomenon by which the future life expectancy of some non-perishable things, like a technology or an idea, is proportional to their current age. Thus, the Lindy effect proposes the longer a period something has survived to exist or be used in the present, the longer its remaining life expectancy.In entrepreneurial terms, these are businesses that will endure for a long time and have a greater probability of doing so as they age. Alternatively, you could think of them as businesses that resemble grandmothers' heuristics; they have stood the test of time and have less reason to fail with each passing year. In other words, they are the opposite of cash-burning companies that drive blindly down a highway, ready to hit a wall and then blame the world economy. The older you get, the more likely you are to endure.
What’s the matter with Lindy?
Let's travel to Algeria, my roots' homeland. There, you have some local shops selling garantita1 since 1979 that are Lindy compatible. They thrive on fewer than ten ingredients, master their craft, and sell a product that does not need hype. It's not a high-return, scammy NFT; it's a humble product, and if you live in Algeria, you'll see it until your last breath. It won't disappear, ever. A nuclear bomb would just make it slightly harder to get, but you’d still find garantita.
During the last 45 years, the owners have gone through a civil war, hardcore violence, the banking crisis of 1986, a financial systemic blow-up in 2008, and an ever-greater volatility of raw products worldwide. They were also there when central banks unleashed the zero-interest mad dog on the market, and during the last decades, when tons of zero-interest-rate profiles made their appearance because of easy money flooding around the world, among them crypto-traders, NFT start-ups CEOs, most venture capitalists, and innovators working at accelerators with no-skin-in-the-game.
And yet, they survive and sell that simple product. They never blame macro-economic conditions for whatever challenge or potential danger they face in the business. They are Lindy-compatible and also have a sense of pride and honor in business, and in life.
The culprit is everywhere but in the mirror
What's my point, talking about garantita?
Recently, a few companies, VC-backed and led by very shiny CEOs, had to close down their activities or announce bankruptcy. There's no shame in that; most of those businesses tackle tough issues on a large scale and dare to make a difference. I've messed up some businesses, and I will mess up some more, trust me on that one. What I hopefully won't do, though, is blame macro-economic conditions if I received substantial funding based on really crazy macro-economic conditions.
Here is the script: Companies led by ex-<some-big-company-losing-cash> create businesses totally outside their knowledge expertise and blow up the bank. They end up raising even more money as VCs are flooded with free cash. Remember, interest rates—the gravity of the economy—were close to null, and pension funds had to invest that cash somewhere. Once they finished destroying their finance, growing at all costs for no margin, the VCs, now facing non-zero interest rates to their great surprise, are no longer flooded with money and refuse to rock 'n' roll again. If you are the CEO, you have two solutions:
Write an honest statement and take your loss with pride and honor: you missed it, and yet you are proud because you tried something 99% of Mckinsey consultants walking to their death daily will never do. That's fine, excellence is the ability to take pain. I would add, take it with humility and pride.
Blame macro-economic conditions and act like a spoiled, entitled kid that can't build a business without free millions. That's immature and proof you weren't really about it in the first place.
Some young, shiny startup founders-not-entrepreneurs did not learn the Lindy effect because they did not need to. My garantita local shop has skin and soul in the game and would better find a way to make that food company robust to global crises. He probably already burned his skin a couple of times before and had no investors to save his life.
I bet that in the coming months and years, we will see tons of those unbearable statements. Good businesses must be on the good side of randomness: they thrive with the high-rollers when cash is gushing in and the economy is booming, and they are sustainable when luck shows the other side of the coin.
If your business needs once-in-a-century macro-economic conditions to survive... then you probably should figure out what's wrong with it.
Be like a garantita seller,
Take your losses with honor
Don't blame macro-economic conditions after spending years posting your team spoiled with goodies; you should have watched your costs.
Love,
Voss
Per WikiPedia : […] Iconic Algerian street food sold throughout Algeria by street vendors. It has similarities to pies, pancakes, and flans and consists of a chickpea batter topped with beaten egg and baked, and is served with harissa and cumin either hot on bread as a sandwich, or sliced into squares. NDLR : This is not keto gluten-free bullshit, this is real food, that you eat watching at the sea with somebody you deeply care about. No almond milk or cucumber limonade : Selecto, Hamoud, or nothing.