The whole idea of The Funded really intrigued me, and had something in common with a little side project of mine called The Founder’s Quandary. But I had no idea who was behind The Funded, so I had no idea who to contact about getting involved or at least offering a virtual high-five.

For it’s first six months it was unknown who “Ted” really was. That is, until Ted unveiled himself as Adeo Ressi, a well known, somewhat controversial, entrepreneur. In the past couple of years Adeo and I have exchanged a number of emails, mostly about how I might help The Funded and perhaps even help with something here in Boston. Well, the good news is that The Funded has announced Founder Institute, and it’s arrived in Boston!

The Funded Founder Institute, a four month program to help founders build the next generation of world-class technology companies, is launching a new semester in Boston from July, 2010, until October, 2010. The program is run by founders for founders, providing a structure for successful entrepreneurs to share their experiences and to provide guidance. Everyone that graduates from the program is invited to join a pool to share in the equity upside generated from the success of their peers. This adds a unique camaraderie to the program and creates a long-term peer support group with a vested interest in your success. If you have a new company or if you are thinking to start a company, take a moment and apply to the program. The program has an early acceptance deadline of May 23rd. Apply here.

If you’re an entrepreneur in Boston I hope you’ll take a look at this opportunity and get involved! I’m just thrilled to see this happen, and I’m eager to see Founder Institute nurture and provide fertile ground for entrepreneurs!

Related articles by Zemanta

• The Founder Institute Launches In Boston, Now Incubating Startups In 10 Cities (techcrunch.com)
• The Trouble With Venture, Through Adeo Ressi’s Eyes (blogs.wsj.com)
• The Founder Institute goes global (venturebeat.com)
• Born in Silicon Valley, Founder Institute Expands to Boston (xconomy.com)

Is the Democrat from Connecticut out of his mind? What is he trying to achieve here, raising revenues for the federal government? I don’t get it – where’s the logic in this provision? Maybe someone smarter than me can help me understand, but in the meantime if you are for entrepreneurship, for innovation, for job creation, for small business, then go here and sign the petition to stop this nonsense.

More information can be found here on The Huffington Post, in a well penned piece from Robert Litan. A quote follows:

Various studies published or sponsored by the Kauffman Foundation have made it abundantly clear how dependent the U.S. economy has been and will continue to be on the formation and growth of new companies. Angel investors are important funders of new companies. There is no good time to make it more difficult for them to invest in startups, and now — when the economy is struggling to recover from what may be the deepest recession since the Great Depression — is the very worst possible time to discourage angel investment.

Sign the petition here.

Related articles by Zemanta

• Robert E. Litan: Proposed ‘Protections’ for Angel Investors are Unnecessary and Will Hurt America’s Job Creators (huffingtonpost.com)
• Are Incubators and Angels Gaining Leverage On Larger VC Firms? (readwriteweb.com)
• CitySquares Acquires Online Retail Directory Yokel.com (searchenginewatch.com)
• Proposed Financial Regulations Could Cripple Angel Investing (readwriteweb.com)
• Dodd Bill Could Render Startups Too Small to Succeed (xconomy.com)
• Startups Get Hit By Shrapnel In The Banking Bill (avc.com)
• Dodd Reform Bill Contains Provisions That Would Punish Startups: Fred Wilson (huffingtonpost.com)

When I look back at the entrepreneur I was four years ago and compare that guy to the entrepreneur I am today, I see two very different people. The entrepreneur in 2005 was much more naive and immature. I was so much more of an idealist, so much more pie-eyed, and I had a sharp tongue and quick trigger-finger that I had a hard time controlling. I’m still an idealist, I’m still pie-eyed, and I’m still naive and probably still a bit immature, but today I’m much more rooted, more grounded, more focused, and much more thoughtful about how I communicate and how I handle stress. That’s been a real battle for me – balancing life, making sure that my work does not define me, and hence dominate me.

So much has changed in the local search arena too. When we started many of the players we hear about today were as small as we were. Citysearch was really the only major player. We hardly knew what we were stepping into and local search is a more crowded and competitive space than I ever anticipated, and rightfully so, the market opportunity is massive. That kind of competitive environment has only kept our edges sharp and kept our eyes keenly focused.

The business itself has matured in many ways yet the model itself is still largely intact. That’s a real testament to the market opportunity and do our original business model. While the economy has presented a number of substantial challenges, we’ve been able to navigate our way through the choppy waters and in some ways its actually helped us sharpen our tools. It took us a few years to understand a number of the most fundamental parts of our business model and test them, and now, through some amazing partnerships and alliances we’re about to unleash some powerful solutions to a core problem in the marketplace.

Some of our identity changed over the past four years too. Unfortunately, as a small business with limited resources, there are only so many things we can accomplish. Our heart is big here at CitySquares, and we want to do so many things, want to give and contribute so much to society. If we were a non-profit, we could focus all of our time on these things, but we’re not – we’re a business. We’re in business for a reason, to tackle the market, solve a problem, deliver value for our customers, and along the way make money and provide a return for our investors. It’s not complicated, but realizing that took some time. I look forward to returning to those ideals at some point, be it through CitySquares or other channels.

My partnership with Bob has grown so much, and it’s just been awesome to watch him grow as a professional in parallel to my growth. Bob has stepped up, challenged himself, and done so through some very difficult circumstances. Not only has my partnership with Bob grown and blossomed into a very solid and loyal one, but our friendship has strengthened immensely. We may not hang out as much as we both would like but we don’t need to. I see Bob more than I see my own wife, and our friendship is evident to those who work with us and evident in our ability to work together through thick and thin.

I’ve also had the pleasure of seeing my colleagues grow as people, as life inevitably happens, and see them grow as professionals. Start-up life is not for everyone! That’s a fact! People who I work alongside, like Justin, Kim, Michael, Amber have proven themselves not just as contributors to the business and the company, but as loyal companions who continue to illustrate every day what tenacity and perseverance is about. They are the embodiment of these characteristics. They’ve also become friends and I’m so proud of them, and I’m excited to work with them in the months and years to come, and be able to provide for them and support them as they grow.

I’d like to point out some of the folks who’ve joined the team, stuck it out, and supported us in any number of ways. These people are not all necessarily employees, they’re friends to CitySquares too and their contributions to the company and the business have just been awesome. These folks continue to support us. The list is long, they know who they are. I’m not sure that this anniversary merits thanking them publicly, not quite yet – that day will come, I’m sure of it.

Along the way over the past four years we’ve made friends in the business too, with competitors, industry experts, vendors, service providers, consultants, press and media, and fellow startups and entrepreneurs. They’ve all added to the fun and the experience of CitySquares. Along the way we’ve also seen companies fail to succeed, entrepreneurs see their dreams crushed, and see the underbelly of entrepreneurship, startup life, and even see unethical behaviors by people and companies. These things have all taught us, made us stronger, and made us wiser. No different than a person going through life – learning lessons and becoming wiser in the process.

We’ve made mistakes, of course. I’ve made mistakes, no doubt. But today, on our 4th anniversary I can proudly admit that we’re doing something right. It takes a team to make that happen. No one person is responsible – everyone and everything listed above, and more, is just one of the puzzle.

So while an anniversary such as today’s is special, its just a milestone. There’s still so much work to be done. We can celebrate briefly, but the work continues. Every day is another day in the trenches and we need to advance our lines.

Onward and upward we climb, into our fifth year, heads held high, humbled, courageous, wiser, and focused more than ever.

Thank you for reading.

In our great country, the US of A, there is an overwhelming spirit of capitalism that trickles down to every street corner and school yard. Over the decades that spirit has become what it is today – the spirit of entrepreneurship. Once upon a time “entrepreneurship” was actually a rare thing, but today it seems that everyone knows an entrepreneur in one form or another. People like Bill Hewlett and David Packard, Bill Gates, Paul Allen, Larry Ellison, Steve Jobs and more recently Larry Page and Sergey Brin, among countless others, have made entrepreneurship what it is today – something that many actually aspire to become. It’s a radical new time, a very different one than those my parents grew up in.

One of the most misunderstood part of entrepreneurship is also one of the most critical parts – the part of fundraising. Over the past few years as CitySquares has raised money, it never ceases to amaze me how many people ranging from self proclaiming “entrepreneurs” to family and friends just don’t have the slightest concept of what raising money for a start up actually means. I’ve often heard some people inquire “wait, you got so-n-so to just give you money?” Just the tone of that question makes it sound like an entrepreneur is like a street corner pan handler begging for charity.

There are primarily two types of investors in the entrepreneurial and start-up worlds – Angel Investors (and Angel groups) and Venture Capitalists (and venture capital firms, a.k.a. VCs). I won’t be discussing VCs, just Angel’s, as they’re affectionately called. Angels are indepenently wealthy individuals who invest their own money in a business and usually do so in exchange for equity (usually Preferred Stock) in the company, or sometimes in the form of a Note – effectively a loan that will convert into Preferred Stock. It’s not that complicated really. Some angel investors are professional angel investors, others are current or former entrepreneurs themselves. For example, one of my Angel’s built and sold his high-tech company to Yahoo! in the late ’90s for several billion dollars in stock. Another of our Angel investors has been an executive at several multi-national high-tech companies and did extremely well along the way as these companies exited (went public or were merged or acquired). Angels are also “accredited investors” as defined by the Securities and Exchange Commission. Sure, anyone with some money can make some investments and call themselves an Angel Investor, but to truly be an legitimate investor they really need to be an accredited investor (SEC definition, Wikipedia definition). I should also briefly note that the term “Angel Investor” is not a legal term, it’s more of a term of endearment that seems to have stuck throughout the years.

The most famous angel investment that I’m aware of is the $100,000 check that Sun Microsystems co-founder Andy Bechtolsheim cut to Google after watching Larry Page and Sergey Brin demonstrate their technology. The funniest part of this story is that the founders couldn’t do anything with the check for weeks because they didn’t have a legal entity formed under which the check was made out to.

There are other famous Angel investors like Andy, including Mark Cuban, Mark Andreessen, Ron Conway, and others. There are thousands of mostly unknown Angel Investors too. At the end of the day they all want the same thing – a return on their investment. Fair enough.

Some Angels work together, in what are known as Angel groups. These Angel groups typically form out of a shared sense of fostering entrepreneurship in a specific city or region or industry, among other reasons. The Angels might meet once a month to discuss their investments, invest together in companies, and invite startups to pitch them.

Here’s where it gets sticky. Imagine, for a minute, that you’re a young and budding entrepreneur. Let’s even say that you dropped out of college (like so many famous entrepreneurs have), you live in a house that you share with seven other young people, and you barely make ends meet. You make enough money waiting tables to cover your share of the rent and bills, to go out with friends, to take your girlfriend out, and afford yourself a cell phone and other bare essentials (by today’s standards). In addition to your part time job waiting tables at a nearby restaurant, you, in your spare time, have an affinity for cars and technology. And in this spare time you conceived a new technology that can power automobiles using carbon dioxide and have a very simple prototype designed. Pretty cool right? Probably a market for this? Maybe sell it to GM, if you can just prove that it works well, and that it’s affordable? Solve a climate problem? OK, so you need money. Your Mom and Dad are tapped, and they’re also pissed because you dropped out of college. Your uncle is good for $2000, so is your girlfriend’s parents. But you need more than $4000 to really build a working prototype, to hire someone to help you market it to car manufacturers, to hire a patent attorney to help you protect your Intellectual Property, etc. Sitting alone at a local pub you put some numbers on the back of a napkin and calculated that you really need $200,000 to get this idea off the ground and build a product and go to market. So… where do you go?

You have some friends who know people that have raised money from investors and had some success – you get the introductions and before you know it you’ve gone from playing Wii at home with your roommates to being thrust into the world of entrepreneurship, IP, angel investing, venture capital investing, business models, business plans, etc etc. But you need capital – plain and simple. Where are you going to go? You need to meet some Angel investors.

How do you move forward? You need to present your technology and business model to an Angel Investor, or more likely to an Angel group. There are many of them out there. A quick gander on the ACA website shows that there are actually a few right in your city. So you email an executive summary to these groups at their general email address and hope for the best. What usually happens at this stage is that you receive some responses from the Angel groups asking you to fill out an online application. The application process is a tedious but excellent exercise, forcing you to refine your concepts into just a few sentences, and to present your financial forecasts and capital requirements. The application process isn’t fun, especially when you have to do it for 4 or 5 different groups. Then, you wait. You wait while your information is being circulated among the angels or a committee. Then, after a few weeks (yes, weeks) you get an email telling you how wonderful your idea is, how excited some investors are, and you have an invitation to present to a committee representing the Angel Group. This is very exciting! But there’s a catch… you need to pay $750 first.

Now you pause, and you think long and hard. You ask yourself why you, a bootstrapping, young, starving entrepreneur who’s living off of peanut butter and jelly sandwiches, who’s put so much on the line, should have to cough up $750 just to present your idea to a committee! Absurd right? But what choice do you have… either you pay it and maybe raise some money, learn in the process, make some connections, or you don’t and hope something better comes along.

This is not unusual. Most angel groups want you to pay something to present to them. And they have their reasons, usually good reasons. But doesn’t it seem unfair? Absolutely! Despite their reasoning, it’s just unfair!

When CitySquares was barely six months old we paid to present to an investor group. It was our first time. It was almost the same scenario as I presented above. It cost us about $750. It was a total waste of money. We had a bunch of old timers vet us through their committee, and blow smoke up our asses. So far so good, or so we thought. Two months later we finally presented our business to a room full of 50 or so Angel investors. As it turned out, 90% of the people in the room had no idea what we were talking about. Zero, zilch, nada. They were in completely irrelevant industries, and in the twenty minutes or so that we were allotted, with a ten minute Q&A, it became painfully obvious that not only was our idea way over their heads, but that we’d just wasted $750 and a whole lot of time. And to make matters worse, it was soon made clear to me that this specific angel group had made very few investments and had zero successful outcomes.

How did that leave me feeling? Angry, frustrated, mislead, and a bit more broke.

This not just my story, but the story of many many other entrepreneurs who just don’t know better, who don’t know where else to turn, who have to learn the hard way. This is so much more common then most people realize. But it’s just part of the territory. Just as with any advisors I’ve attracted to the company, the best people I’ve come to work with are those that don’t ask for anything up front. They are genuinely interested in you and your business, and they want to help.

Now let’s get something straight – Angels are investors, and they’re in business as investors for one reason – to make money. Any other reason is secondary. So then, it seems that charging entrepreneurs a fee for pitching them likely has some justifying, right? Sure! But the entrepreneur doesn’t care what about those things. The entrepreneur is in business to make money, but he/she is not rich! And there’s the discrepancy. That’s where it becomes “unfair” – that’s where it’s skewed. Some Angel groups charge a lot more than $750. And there are even some people out there, predators, who prey on entrepreneurs and charge them for introductions to Angel investors. Fred Wilson points this out on his blog as well.

Generally speaking, Angels are not bad people and they’re are not milking entrepreneurs. I think its safe to say that this statement applies to 99% of angel investors and angel groups. It’s a scary place out there for entrepreneurs, especially when you’re being taken advantage of by wolves in sheeps clothing – and there are a lot of wolves and no shortage of sheepskin. The key, as with so many other things in life, is to sift through the bullshit, the noise, and use your instincts and intuition. That’s not easy, because all the signals can be confusing. In addition to using your basic human intuition is associating with the right people, good people, people who from the start do not want to take advantage of you, and people who are genuinely interested in helping you move to the next checkpoint. CitySquares was fortunate enough, after learning some of these lessons, to meet these of people. These folks guided us in the right direction, brought us into the right meetings, made the right introductions. And they didn’t do any of this for a fee.

My advice? Do your homework. Find out if the angel groups have had success, and if there’s a genuine interest in your kind of business or industry. Find out if they’re the right profile of investor you’re looking for. If not, then move on – don’t waste your time or money. Another piece of advice is to find a back door into an Angel group. Don’t follow the same protocol as every other company. Find a way inside the angel group through a connection – perhaps one of the angels in the group is active in your industry!

I think Jason Calacanis is doing a great thing by calling some of these groups out, because some charge a very unfair amount, and some of them have developed reputations for being egregious in these regards, and for wasting entrepreneurs time and doing little to nothing for the entrepreneurial scene. And Jason has a great platform to do this. These Angels and/or Angel groups definitely have a knack for ruining it for the others, and spoiling the bunch. That’s a damn shame.

Angels are fantastic resources beyond their financial capital. They’re intellectual capital is often priceless. They contribute a lot to the economy, providing financial capital for hiring people, for creating industries, and much more. Don’t let the bad ones spoil what can and should be a wonderful entrepreneurial experience for you and for the world.

I’m going to spare you the details here, and let you learn about them here…

The Founder’s Quandary – the blog
The Founder’s Quandary – the Ning community
The Founder’s Quandary – on twitter

If you are a founder, please join us.

It’s quiet here though – there’s lots of empty offices and we’d love some company! There are small offices that are perfect for just one or two people, and there are larger offices that can accomodate a dozen people. There are conference rooms here that we all share, there’s even a pool table.

If you’re a Boston area business looking for a real office space with all the fixin’s of a business environment, let me know and I’ll send you over to the new landlord and make sure you get special care! I have nothing to gain here except having more neighbors!

Oh, the space is very funky too – great for Internet companies, media companies, startups, non-stuffy businesses.

Some of our awesome and friendly neighbors:

SCVNGR- SCVNGR is an interactive texting scavenger hunt that uses proprietary cellular technology to send out clues via SMS (short message service). The SCVNGR service enables the players to access several useful features such as texting SCORE to receive real-time results on how they are faring against other teams or texting HINT to SCVNGR’s short code to receive help solving a particularly tough clue.

Advantage Reprographics – Advantage Reprographics is dedicated to eliminating the cost and headache in managing document histories, printing and delivery. We focus on tailoring custom software to help streamline print output. We have State of the art printing and scanning equipment by Oce and HP, used to turn around the highest quality, right away! Give us a call and we’ll be right there to help you out.

PFL Printworks – CD & DVD duplication, Posters, Flyers, Press Kits

Exxcel Model & Talent – Exxcel Model & Talent is a full service model/talent agency representing models of all types such as female/male fashion, commercial print, child and plus size. Talent representation includes actors for film, television, commercials and theater, as well as singers and dancers.

Brand Networks – “If your Brand is ready to hit the social scene, we’d like to help. Our BrandFans methodology will ensure you network with the right people. Our BrandSolutions are social technologies that connect you with your fans. And we surround it all with BrandServices from social and creative humans just like you.”

SEEDA – The South East England Development Agency (SEEDA) is here to assist companies looking to set up and grow their UK and European operations from a base in the South East.  Our purpose is to promote the growth of the economy and creation of jobs in this dynamic region of the UK.  We provide professional, free and confidential advice and our service can save your company valuable management time and money.  SEEDA works in conjunction with UK Trade & Investment.

Jetpack – Jet Pack is a comprehensive web marketing package for small and medium sized businesses. Each account gets a dedicated internet marketing specialist to setup, manage and optimize for the best results. Our hands-on approach drives more traffic and provides higher conversion rates at an affordable level than full-time marketing agencies.

Everyone needs to smarten up, fast. Individuals, companies, no one is excluded fro this. If you weren’t aware of this a few months ago, in late Q3, you better damn well wake up! I was shocked the other day to learn that a friend of mine is actually quite clueless about all this. He’s a bit insulated from it where he lives and in his line of work, but no one is really insulated from this. My wife works at Harvard University, which recently saw its endowment cut substantially, losing 8% or $12B. For the first time in a long time, people are losing their jobs at Harvard, seeing their pay cut, seeing bonuses and scheduled raises off the schedule. Harvard, one of the most stable employers in Massachusetts, is having these kinds of problems. Again – no one is insulated.

This applies to startups too, of course. In fact, I’d say it hits us harder and faster than most other businesses. And that brings me to my point. CitySquares has been hit by all this. Sales are down as small businesses were reacting to the news in September and October, and as they refocused their energies and also smartened up. Sales are down, cash flow is down, some of our customers have gone under, some have been unable to pay their bills. Nevertheless, we’re seeing our way through this. We have an amazing tribe here at CitySquares – some extremely dedicated and passionate people. These qualities were demonstrated this week when I asked everyone to take a pay cut. The result? Some people took bigger pay cuts than they were asked to! And another thing – everyone stayed. Attitudes are great, everyone is as committed as ever. It’s just amazing to me.

I learned so much this week, as a CEO and as a Founder. I learned about employee psychology, I learned about my own abilities as a leader, as a CEO, as a founder. I learned even more about buy-in, about the difference between a decision and a choice.

So, CitySquares underwent pay cuts this week and I can honestly say that on this blog with pride, and with my head held high. Because I know that our team is prepared to do what it takes to weather this storm. Because they understand that paycuts for everyone means no one gets let go, everyone stays. And this tribe is aware of the same goal we’ve had for the past two years – the goal that’s now within 5-6 months from happening – the goal of cash flow positivity. The only way we can make that happen is if everybody here is on the same page, and that has not changed. Everyone here must work towards the same goal! Cash flow breakeven, in this market? In this economy? Outstanding! Show me a business that’s within 12 months of cash flow positivity, and I’ll show you a business that gets it. But show me a business that’s not making changes, not making the necessary cost reductions, not doing everything to ramp revenues and I’ll show you a business that’s in a lot of trouble.

Another thing, we wouldn’t even be here talking about this right, nor ever even arrived at this moment in time, if it weren’t for our investors, our angel investors from eCoast Angel Network and other outside investors like Jonathan Kraft, Mark Cuban, even my own father, among several others. We’re truly fortunate to have such fantastic individuals behind this company. Angel investors are special and its easy to forget how important they are to the economy, to the capital systems, and to the world of entrepreneurship. Angels make it happen.

So, there you have it folks. The truth as bare as it comes! And that’s what my blog entry from earlier this week was about – the difference between decisions and choices. Decisions I had to make, and choices that I had to give to the staff. There were difficult, very difficult, decisions that I had to make, along with our board of directors. These decisions lead to other decisions, and choices, for the tribe – and this week they all chose to help each other, to make the necessary personal investment, to protect each other.

Monday was one of the hardest days I’ve ever had at CitySquares. Today is one my proudest.

CitySquares has a tribe member who’s been with us for about a year now. She’s a rock star in so many ways. She also really enjoys her job and is proud to work at CitySquares. This is partly what makes her a true member of the tribe.

For the last year she has filled some big shoes, and performed in a job that was not well defined for her. She kicked ass at it, like I never thought possible. And over the course of time she’s naturally filled a role within the company that not only has been a bit of a vacancy within the organization, but is something she’s simply really good at.

No one asked her to do these things, no one pointed her in that direction. Instead, she saw a need in the company, and then filled that need. She’s done so with poise, enthusiasm, with total ease. Today, she was formally moved into that role.

What she did over the course of time, perhaps unknowingly, is what she’s good at, and what she enjoys – voluntarily – on her own. She did so because she has a natural expertise with it, and because she has a passion for it. You just can’t buy that.  The result, and hopefully the result of good observation by management, is a permanent move into that role. This will result in even better performance in this role, it addresses a need within the company, in a happier, more efficient, effective successful company, it results in happier customers and better retention rates, and best of all – a member of the tribe who’s even happier and more successful.

Our primal fight-or-flight response – something that’s deeply ingrained in our primal instinct – is tested during times like these, among others. Fight-or-flight theory suggests that

“animals react to threats with a general discharge of the sympathetic nervous system, priming the animal for fighting or fleeing. This response was later recognized as the first stage of a general adaptation syndrome that regulates stress responses among vertebrates and other organisms.” – Wikipedia

Basically it means this – when faced with a challenge that threatens your survival, what do you do? Do you fight? Or do you flee? Either answer could be right. For example: If you are in the forest and face-to-face with a mother-bear in the woods, you’re natural instinct may be to flee – run for your freaking life! And you may be right, but do you take that risk? Or do you just stand still and don’t make a single movement. That’s also the right answer. Or, do you stand tall, wave your hands like a maniac and create the illusion of size, height, strength, fierceness? Either way, what you’ve decided not to do is to fight the bear. Yet if you’re face-to-face with someone who’s invaded your house in the middle of the night, you’re natural instinct is to fight the attacker off with a weapon. That might be the wrong answer. Either way, we’re talking about instinct here – our primal reaction to what challenges our survival.

There are fine lines here too, subtleties. For example, some people face very tough challenges in their lives. Maybe a child lost her parents when she was very young – does that child now stand up on her own and claw her way through life, taking care of her baby brother? Or does she give up, and rock back and forth in a fetal position? Hard to answer, hard to say. How about an adult who loses everything to a gambling habit or to drugs? Do they claw their way back or do they slide into the downward spiral? And when do they decide to start fighting? Hopefully before it’s too late.

OK, you get the point – sorry to be so depressing but these are examples that shape who we are, these are decisions we all face at one time or another, in our respective ways. They define people for the rest of their lives.

This now begs the question – what does a company do when faced with hard times? When an economy is slowing down, when the chips seem to be on the other side of the table, what decisions does the company take? How does it respond? How does its personnel respond? How about its sales people? Management? What about the Board of Directors, or the shareholders? How do all these stakeholders respond? And do they all agree?

I was on a flight the other day thinking about this very subject while flipping through the recent issue of Inc. magazine when at page 28 I came across a little quote from famed management guru Tom Peters. To quote Inc.:

Tom Peters is most associated with managing during bad economic times. His In Search of Excellence was published amid the sharp recession of 1982, and Thriving on Chaos debuted on Black Monday in 1987. On TomPeters.com he recently wrote about running a business in a time of “significant and sustained economic disarray.”

I liken Tom’s quote to this very subject – fight-or-flight. My favorite line, and the same line quoted in Inc., is in bold text below:

While many businesses will fail amidst the current economic crisis through no fault of their own, some will survive in spite of the odds—and a few will surprise by turning a messy situation into economic-competitive advantage. The requisite winner’s attitude is expressed by former Ritz-Carlton chief Horst Schulze, commenting on his decision to launch his new high-end hotel business, Capella, despite the market madness: “I do not accept the explanation of a recession negatively affecting the [new] business. There are still people traveling. We just have to get them to stay in our hotel.” And, indeed, getting an “unfair share” of “what’s left” is near the heart of the matter. Schulze’s remarks also remind us that instant, mindless cutting of R&D or training or salesforce travel in the face of a downturn is often counterproductive—or, rather, downright stupid. Tough times are in fact golden opportunities to get the drop, and the longterm drop at that, on those who respond to bad news by panicky across-the-board slash and burn tactics and moves that de-motivate and alienate the workforce at exactly the wrong moment.

Tough times indeed require tough and unpleasant decisions—but thriving, not just surviving, is an option for those who mix wisdom and boldness of leadership with transparency and maximized employee involvement and engagement. Without suggesting that there is anything humorous about the pain that bad times cause, one can say that “this is when it gets fun” for truly talented and imaginative leaders at all levels and in businesses of every sort and size!

I frequently hear words of doomsday and panic from those I’d expect to hear it from – backseat drivers and people who’ve never really done anything, or who’ve never really  been there and done that. From people who’s claims-to-fame are an MBA, or who rode a wave at a time of great opportunity and when everyone else was riding the same wave. I hear words of fear, reactionary language, strong opinions from those who don’t see beyond their own horizons, from those who lack vision. Yet I hear words of encouragement, of calmness, an almost harmonious philosophy, more proactive and forward thinking language, and open-mindedness from those who have been there, who have done that, who are glass-half-full, those who have vision.

The hard times in life test people – test our instincts, like our will to survive. Hard times test our humanity, shape us into who we are. Hard times make us stronger, but only if we choose to fight.

Companies are no different. We must choose our battles wisely, but we must forge ahead. We assess the battlefield, have a battle plan, fortify our properties, and attack the weak spots of enemy lines. We put the sun to our backs to blind our competition, and we fight! We do not run! We do not hide! We attack in waves, one powerful wave of attacks after another.

Entrepreneurs, you’ve arrived at this destination by your own choosing! You cannot control the climate, or the environment, you can only control your reaction to it. Smarten up, stiffen up your spines, and get to work! When the going get tough, the tough get going. Fight! These are opportunities!