During this Great Coronascare, it seems like every company you’ve ever submitted your email to in the past suddenly found it and wants to be your pen pal again.
And for the most part these emails are all nonsense. For example, I got an email from the bank where I pay my mortgage.
Did they mention anything about a mortgage interest freeze? Nope!
Instead, they sent an email along the lines of, “We’re here for you, and you can bank with us 24/7!”
And honestly, I don’t blame them. They’re interested in making money just like everyone else is.
But still… *Deleted*
However, I did get one email that caught my eye. It was the only one made the cut. And it wasn’t even related to promotions, special accommodations or anything.
There was an app I used a while back simply called Service. Basically what the app did was when you booked a flight, if by chance there was a delay, the app would re-coup some pocket change for you.
You didn’t even have to do anything except be a user.
The app did the same thing with hotels. When you booked a hotel room, if there was a price drop after you booked, Service would try to get some money back.
It was kinda handy. I got over $100 back, so put that in the Win column. But somewhere along the way, I must’ve deleted the app because I don’t have it now and I probably stopped caring.
But a few days ago, I got the following email from the Founder and CEO of the company, and he didn’t have good news…
“Despite partnerships with major brands such as KAYAK and Microsoft, we have never turned a profit, despite a focus on revenue growth and cost cutting through software automation. We were in the middle of a fundraiser when it collapsed two weeks ago, and then we were in the middle of an acquisition that collapsed last Friday due to everything going on COVID-19 and the economy. Having explored all possible options to continue on, we have exhausted them, and Service will be shutting down on Friday, March 20. We are giving our users a 24 hour grace period in case they want to log in to their account to download any data; the app and website will stop working tomorrow at 9am PDT.”
Just from this paragraph, there are some interesting takeaways. I’ve also seen some of this first-hand during my time in business…
- Some industries, like the hotel and airline industries, depend on a good economy in order to thrive. When there’s a recession, that’s when a lot of the money stops coming in for them.
- As much as companies intend to turn a profit, a good portion just break even.
- A ton of companies focus on cutting costs, but there’s only so much bottom line you can cut before you start bleeding big-time.
- Some companies, including start-ups, focus on one-time income events (Fundraising, acquisitions, new website launch, big announcements, the major industry trade show) and not consistent revenue-generating marketing systems.
- Companies like to blame factors outside of their control (Bad economy, industry innovations and disruptions). They don’t like to look inward and see what they can fix internally or how they can pivot.
Now I could analyze this several ways from just personal experience, but I’ll stick to one angle.
Did they do marketing? Sure! They had a blog and they even had social media which has since been taken down.
- However, did they do any good direct marketing like email marketing?
- Did they produce interesting informational and personality-driven content?
- Did they use different media like video and podcasts?
I don’t remember if they even sent regular emails. If they did, they weren’t good enough to stay subscribed to. So my guess is no across the board.
The bigger question is did they even sell anything like additional products or services?
Or did they have the typical start-up mindset where they were only focused on users, and not how the money was coming in? My guess would be the latter.
The bottom line is any 9/11, financial disaster or pandemic could leave you standing, but completely wipe out your business or leave you in the red.
That’s why it’s important to generate as much money and do what you can, regardless of whether times are good or bad.
And with the economic damage this virus is doing, everybody is going to take a hit. It just depends on how much of a hit you take.
For example, a portion of my retirement account took a major nosedive. Sure it’ll bounce back eventually, but me and all of the rest of my friends don’t want to talk about our 401K’s. It’s a sensitive subject.
But business owners are getting hit the hardest right now. I have a friend from college who operates a diner in the small town where he’s from. He had to shut his restaurant down temporarily by order of the State and told his employees they won’t have a full paycheck this week.
Is his income going to take a major hit? Hell yes. But once he opens his doors again, the money will be coming in. That’s a much better position than the owner who just wants to break even.
A few days later after he had time to process what happened, he jumped on his Instagram and posted away. He said if anyone near his area needed food from his kitchen due to shortages to message him and he would hook them up.
He’s definitely not making money right now, but what he is banking is a ton of goodwill, and giving himself great positioning with his customers.
You may not be able to do everything you want during this time, but this too will pass and there’s always something you can do to give yourself a running head start.