Roaring out of Recession: 4 Growth Opportunities

The Growth Report - #13

Today's topics include

📈 Growth Marketing:
Roaring out of Recession: 4 Growth Opportunities

🏗️ Technology Trends:
Wake up! It's time to build.

⛑️ Reflections from the trenches:
You are what you do, not what you say you'll do.


📈 Growth Marketing

Roaring out of Recession: 4 Growth Opportunities

The economy ebbs and flows through cycles of growth and recovery, just like every other organism in life. And while a prolonged economic downturn aka recession seems unavoidable, there are also hidden opportunities if we study its implications closely.

In the article Roaring out of Recession from Harvard Business School (2010), they analyzed companies' reactions to economic downturns and what sets apart the losers from the winners when it's all said and done:

"Only a small number of companies—approximately 9% of our sample—flourished after a slowdown. These companies were quick to cut costs and focus on “operational efficiency,” but, crucially, they were also quick to invest relatively comprehensively in the future by spending on marketing, R&D, and new assets."

So let's have a look at four growth opportunities you can seize in the coming months, to be one of those 9% of companies that come "roaring out of a recession" 🦁

1. Build audiences with cheaper paid advertising.

One of the quickest cost cutting measures across the board happens in paid ads. Because ad costs are variable and in today's world can be turned off with one click of a button. The ad agency Primer recently reported that they have seen a 23% overall decrease in CPM (cost per thousand impressions) and in certain industries up to 40% lower ad costs. That's substantial!

So for you that means, paid advertising right now is more cost-effective than ever. And not only that, every major social platform has reported record-breaking use of their apps, resulting in significantly increased engagement (likes, link clicks, comments).

So Ryan Law from Animalz suggests:

While enterprising B2C companies are leveraging paid advertising to realize record-breaking revenue, the benefits extend to B2B companies too. It’s possible to run cheaper-than-normal experiments to refine ad messaging and audience targeting for future use, and lucrative to run paid ads to a gated resource—like a webinar or an ebook—to generate email sign-ups.

2. Ride the wave of growth from changing consumer behavior.

Every major recession results in significant market shifts as it's effects ripple out into every nook and cranny of the market economy. Now the question becomes: What will the post-COVID economy look like? How can you position your company to take advantage of these shifts?

Again some useful advice from Ryan:

Now is the time for creative plays. Where does the first-mover advantage lie? What marketing messages and search terms can you own now, in preparation for a future where they’re more popular and lucrative?

So think of it not only in terms of how you can change your product or business model (though that too), but also how you can provide thought-leadership on how these trends affect your industry. Everyone is in a state of uncertainty now and if you can lead the way, your (potential) customers will remember you!

While it's not the goal of this article to go into a trend analysis, I have thought and read a lot about it over the past few weeks and here are a few ideas where I think we'll see big technological improvements and an influx of companies and users in the coming months and years:

  • Remote Working

  • Health Analytics & Robotics

  • Employer Mental Health Services

  • Telemedicine

  • Online Education

  • Live Online Events and Conferences

  • Direct to Consumer Logistics

  • Healthcare Digitalization

  • At-Home Wellbeing/Lifestyle Products (Plants, Gardening, Hygiene, Cleaning, Furniture, Cookware etc.)

If you want to talk through those trends, please send me an email. I'd love to hear your thoughts.

3. Shift event budget toward content marketing.

Especially in B2B and high-ticket B2C companies, events are still a crucial part of the marketing playbook. But now all those conferences and industry trade shows are not going to happen. So don't just give up your event budget, but use it for content instead!

Examples

  • Live-Online Events: Organize virtual event formats like webinars, customer roundtables, live office hours or full-on conferences.

  • Podcasts: Try out new formats like audio or video content. It's much more personal then a blog post and let's your customers see and hear the companies' employees from the comfort of their homes. The next best thing to in-person events I guess.

And as I can attest from my own experience. If done right, you can attract many more visitors and leads through online formats than you normally do with offline-events.

I've also seen other content popping up like Spotify Playlists, Zoom Backgrounds, and Children-Activity Books, so get creative and use that event budget to try out new content formats and delighting your customers in new and creative ways.

4. Double down on search to overtake your competitors.

A swath of industries, from home cooking to health and wellness to ecommerce, are experiencing a sizeable uptick in organic traffic. In these industries, doubling down on search content to meet demand is a smart decision. Even in industries likely to experience a downturn in demand during a recession, investing in SEO still makes sense. Articles created now generate visitors, leads, and customers for years into the future.

And in Ryans words once again:

Any budget invested now, during recession, will yield a much larger return on investment in the months and years post-recession. This is especially true when your competitors have strayed from search content and paused their own marketing efforts: your slight head start can lead to an insurmountable moat of ranking keywords and new backlinks.

Any company that doubles down on search earns a competitive advantage, reaping the rewards in 6-12 months, when competitors are scrabbling to regain traffic.

These are only four of the opportunities you can seize and tinker with in the coming months, there are many many more and those who dare to invest now and think past the immediate crisis will be the ones that come "roaring out of a recession" 🦁


🏗️ Technology Trends:

Wake up! It's time to build.

The recent must-read article from Marc Andreessen It's time to build, has made waves far beyond the Silicon Valley.

He comes in, tearing down the gates

Every Western institution was unprepared for the coronavirus pandemic, despite many prior warnings. This monumental failure of institutional effectiveness will reverberate for the rest of the decade, but it’s not too early to ask why, and what we need to do about it.

Many of us would like to pin the cause on one political party or another, on one government or another. But the harsh reality is that it all failed — no Western country, or state, or city was prepared — and despite hard work and often extraordinary sacrifice by many people within these institutions. So the problem runs deeper than your favorite political opponent or your home nation.

In the west, we've become complacent. We are merely making little bets and stopped taking big risks.

Andreessen identifies four major examples of that (all directly quoted, just summarized):

1. You see it in housing and the physical footprint of our cities.

We can’t build nearly enough housing in our cities with surging economic potential — which results in crazily skyrocketing housing prices. We should have gleaming skyscrapers and spectacular living environments in all our best cities at levels way beyond what we have now; where are they?

2. You see it in education.

We have top-end universities, yes, but with the capacity to teach only a microscopic percentage of the 120 million new 18 year olds in the world each year. We know one-to-one tutoring can reliably increase education outcomes by two standard deviations (the Bloom two-sigma effect); we have the internet; why haven’t we built systems to match every young learner with an older tutor to dramatically improve student success?

3. You see it in manufacturing.

Why has so much manufacturing been off-shored to places with cheaper manual labor? We know how to build highly automated factories. Outsourced production and supply chains are not sustainable. Not for us, not for the planet. Why aren’t we building Elon Musk’s “alien dreadnoughts” — giant, gleaming, state of the art factories producing every conceivable kind of product, at the highest possible quality and lowest possible cost — all throughout our countries?

4. You see it in transportation.

Where are the supersonic aircraft? Where are the millions of delivery drones? Where are the high speed trains, the soaring monorails, the hyperloops, and yes, the flying cars?

His rant goes on excluding both money (all of the above fields are highly lucrative already) and technical competence (we do know how to build the next generation) as possible reasons on why we stopped building and stopped dreaming.

But then Andreessen hit the nail on the head:

The problem is desire. We need to want these things. The problem is inertia. We need to want these things more than we want to prevent these things. We need to want new companies to build these things, even if existing players don’t like it, even if only to force the existing players to build these things.

"Every step of the way, to everyone around us, we should be asking the question, what are you building? What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building?"

And while he is certainly polarizing in his essay, I think he has a point. I feel like this virus has woken us up from a big nap. People are slowly waking up to the fact that the west has turned comfortably numb. We forgot that we are standing on the shoulders of giants. The people who we owe our comfortable numbness to: The people who built the roads, the factories, the computers, the internet, smartphones and all those other things that we are taking for granted.

It's cool when startups innovate on new remote working tools, meditation apps and online plants delivery, but where are the big risks (high reward) bets? Especially governments and the corporate world have become more polarizing and power-grabbing over the past 15 years rather than stepping in and leading the way. Because big challenges like housing, education, manufacturing, and transportation can certainly be innovated upon by startups, but are only really possible to go mainstream if the governmental regulations and corporate investments follow suit.

However, I honestly ask myself, now that the media, world organizations, our politicians and power-holding corporates are so divided and have lost so much of the public trust, are they even able to lead the way and get back to building (in the way Andreessen talks about) in the foreseeable future?

In his words we must:

There is only one way to honor the legacy of previous generations and to create the future we want for our own children and grandchildren, and that’s to build.

Please read the full essay


⛑️ Reflections from the trenches

In this section, I share my weekly thoughts and reflections that come up during our journey of building our company GrowthBay.

You are what you do, not what you say you'll do.

Kevin Kelly, the founder of Wired Magazine says:

You are what you do. Not what you say, not what you believe, not how you vote, but what you spend your time on.

People and businesses will often announce to everyone who will listen, that X, Y, and Z is important to them and then the following week we watch them diametrically acting in the opposite direction.

For example a potential client would proudly announce on their website: "We are a customer centered organization. The customer always comes first." Okay cool. Except that in reality they have never done a customer interview before and their real life customer service is mediocre at best. Or somebody tells you: "I love your project, let's do something together", never to be heard from again. Or "I am going start a business", never putting one hour towards his goal.

How are we to make sense of the fact that people don't do what they say they will do?

And please don't get me wrong, I too have found that it's hard to clearly articulate my own priorities, and I'm the first to admit that I am not shy of using (a lot of) words.

So both for myself and for the people I come in contact with, I found it to be much more revealing to observe my/their actions. Because what a person actually does is the only thing that counts. Words are cheap and dime a dozen.

You and I can say all day long that we're customer centric, wanna open our own businesses, hang out more with our family, read two books a month or need to fix the dishwasher, but our actions will always reveal the truth. It's so much more reliable to look at your own or someone else's actions to determine the underlying priorities and accept that words are simply stories we all tell ourselves (and others).

When you need perspective, I found this to be such a helpful tool for making decisions that involve other people or to reassess my own trajectory.


That's it for this week.

Keep quarantining 🏡

See you next week,

Sandro