This recession begs for leadership (and risk)
We are going limp on risk, which bodes ill for the future of the technology industry.
Barack Obama won the U.S. presidency for one very good reason: he presented himself as a credible leader. McCain offered little in the way of hope that he had the intelligence or risk profile to make real changes to the way this country works. This isn't a slap at conservative principles (as a conservative, I hardly feel inclined to do that). It's a slap at conservative leadership.
That's politics, but what about business? Reading through The Wall Street Journal and the Financial Times today, I almost became physically ill reading non-stop headlines that evidence hand-wringing and resignation: job cuts, various industries begging for Papa Government to bail out their own mismanaged businesses, etc. Pathetic.
The one ray of light in the midst of the gloom-and-doom tripe is Daniel Henninger's article, "America Needs Its Frontier Spirit":
The greatest danger in the current economic crisis is that the United States will lose its historic appetite for risk. The mood now is that risk-taking got us into this mess. Risk, though, is the quintessential American trait that built the nation--from the Battle of Bunker Hill to the rise of the microchip. If we let risk give way to a new ethos of commercial reserve and regulatory restriction, the upward arc of the US ascendancy will flatten. Maybe it already has.
Daniel Boone, the famed American frontiersman, went belly-up speculating on Kentucky land. He moved on in 1788 and paid his debts. So should we, without losing sight of the American frontier,w here we discovered the rewards of risk.
Amen. An emphatic amen.
People are rightly worried about job losses, but there's a very good way to overcome them: create new businesses and new industries to employ people. This isn't something that we should do with government: I'm talking about technology-driven businesses, not the CCC of the 21st Century.
Alan Frazier suggests that that the venture capital model is broken. Yes, IPOs have dried up, but perhaps a the model needs tweaking to fund companies that pay back investments in earnings, not stock-market explosions. Having said that, who says the IPO market is closed forever? If we can create new businesses that create new wealth, why wouldn't the market cheer for these counter-trend crusaders?
Oliver Marks writes over on ZDNet of open-source companies that are thriving in the downturn, but we are not alone. SaaS, Web companies, and others that drive inefficiencies out of old markets will do well, even in a recession (or, perhaps, particularly because of the recession). These are our latter-day frontiersmen and frontierswomen.
Let's not give up. The financial meltdown has one clear message: stop spending debt, and return to profitability in our homes and businesses. It does not tell us anything about the need to regulate away risk. Risk is what justifies reward. In this environment, we need leaders who will boldly push forward into taking intelligent risks.
Will you be one of these leaders? Will I?