Mixed signals currently being sent by a range of economic indicators are making it hard for business leaders to move forward with their plans, let alone make any bold decisions. It’s hard not to feel a bit paralyzed.
Take it from me, things felt a lot worse—even dire at times—back in 2009 as the Great Recession took hold. And don’t even get me started on 2001. Yet, I’m so glad that the company where I worked at the time went all in on disrupting themselves rather than freezing in place.
As financial markets were crashing around us, the instinct across most of the business world was that of belt-tightening—with companies cutting experiments and new business ideas in order to double down on protecting their core businesses. We realized we needed to find new ways of selling new things to new people—while we were fortunately market leaders for most of our segments, we had mostly been growing revenue by increasing upgrade and renewal pricing for existing customers versus finding and selling to new audiences. So we began running a lot of aggressive pricing and packaging experiments in smaller markets.
When we initially deployed this new model worldwide, the results deviated from what we had seen in our test market, which caused us to miss revenues drastically. We had many conversations about whether we should try to slow down the migration or “rip the Band-Aid off” and go all in, but, thankfully, our CEO was bold.
There are many more lessons and insights from this experience I can—and probably will—share, but the ultimate result of this experiment was that it transformed our company and business model in just a few short years.
This experience is why I’m certain that today’s leaders shouldn’t panic or take a protectionist stance. Not only will that approach stifle innovation, it will likely hold back growth when conditions improve, and the market always rockets back.
It may seem surprising, but macroeconomic downturns are usually the best times to conduct bold experiments, since any revenue risks or misses can be washed out amid overall market downturns. Said differently, it’s hard to be bold when your stock is at all-time highs and the market is expecting everyone to consistently “beat and raise.”
To be clear, I’m not recommending that you start by going all in on a new thing you’ve never done before. I’ve seen many companies cost themselves years of growth because they decided to do a drastic pivot upmarket to “enterprise” when they don’t know how to sell or support that market.
What I’m recommending are bold business model experiments and building of “learning loops” that enable fast iteration. When you’ve struck gold, only then do you move rapidly to invest.
At Shutterstock, we’re applying this strategy in our approach to product innovation. Specifically, we recently rolled out Creative Flow, a set of tools aimed at making it easier for people to design marketing materials, edit photos and promote their ideas. This is a major investment to expand our offerings in spite of troubled economic times.
Our realization was that we already have millions of creatives and creators using us every day, and those makers were having to bounce between multiple platforms and tools to get their work done. So we seized the opportunity to make life easier for them.
A bear economy is the perfect opportunity to try new things. If there’s one thing I’m certain of, it’s that the economy will rebound. At that point, it’s companies that have placed big bets and run experiments to suss them out that will be primed to soar.
