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Finance

It's the recession stupid

What will work? Owning it. Sharing the pain, expanding your corporate network, innovating, and keeping a wary eye on expenses. What business schools might call blocking and tackling. What your rabbi would call being a mensch.
Written by Dana Blankenhorn, Inactive on

All this talk about demanding new business models, whether open source closing extensions, newspapers demanding we show them our money, or Web 2.0 outfits looking for cash, has a single cause.

It's the recession, stupid. Or it's the stupid recession. Take your pick.

(To the right, the most iconic photo of the Great Depression, Migrant Mother by Dorothea Lange. The girls are hiding their faces, one explained recently, because they were ashamed.)

A falling tide strands all boats.

Advertising revenues dry up, so that model which worked well in good times no longer does. Businesses tighten their belts, so subscription revenues decline. ISPs and Web hosts lose money so they look to squeeze their best customers a little tighter.

Nothing in the models of open source or the Internet is really broken. The economy is broken, around the world. Capital lost in the crash isn't coming back soon, so everyone tightens their belts and some fall by the wayside.

These are the times that test your business mettle. Those who get through to the other side will lead the next boom. Those who don't will end up working for them.

Whining about it, or trying to change the rules of the game, as the newspaper industry is trying to do, won't get the job done. Looking for courts to shake down your competitors and fill your coffers with cash, as Microsoft has been doing, won't work either.

What will work? Owning it. Sharing the pain, expanding your corporate network, innovating, and keeping a wary eye on expenses. What business schools might call blocking and tackling. What your rabbi would call being a mensch.

It's not as complicated as people are making out.

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