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Lessons learned from the 2008 recession that will help you fight the next one

a great post by the legendary timdenning.net

Told through the story of my startup that made it through the 2008 Global Financial Crisis and later thrived because of it.

2008 was a strange time in my life. Apart from being in my 20s and acting like an insecure, pretentious little so & so, a business I part-owned went through a recession.

I’d never experienced this before and markets had only ever gone up since I was in Mickey Mouse diapers back in the 80s.

What does it feel like when the stock market crashes?

Well in 2008, I found out. It started on a Monday morning. The reception phone in our startup office started ringing off the hook. Three of us tried to answer the calls. Each call was from a customer wanting to cancel their order with us. The humans on the other end of the phone sounded desperate and you could hear the panic in their voice.

As a small business, by the end of that day, most of our customer orders were canceled. We went from thriving to having to hand back money to customers overnight. This immediately meant we had to cut costs.

We stopped looking for a newer fancier office to relocate to. We laid off pretty much all of our staff. As business owners, we got used to doing the dirty work again. We swept the floors of the warehouse, made our own coffee, delivered packages ourselves and saved money wherever we could.

The changes came fast and swiftly. Suddenly there wasn’t time to mess about anymore or focus on business tasks that didn’t produce revenue. All of us became salespeople in an instant. Nobody was too big or too small to talk to a customer. Our egos were left on the floor of the Global Financial Crisis we found ourselves in.

Bank of America is saying we’re already in recession. Other financial heavyweights like Goldman Sachs are saying the chances of a recession are becoming much higher.

This time around, as we face the prospect of a global recession, I’ve learned a few lessons that might help endure the process.

Keep your cool

Don’t take the situation out on your staff or customers. In times of panic and fear, a leader shows calmness even if behind the scenes the bank account is empty and next month’s payroll might not be met.

When you project a level of calmness, people follow your lead. With some degree of calm, you can get creative.

A recession forces you to be creative

And we can all use a bit more creativity in business. Creativity is how you solve the long list of problems that will all come at you at once. These problems include:

  • Finding sales opportunities
  • Marketing your business on a shoestring budget
  • Retaining your staff
  • Meeting payroll
  • Having fun as a team without spending money
  • Keeping a smile on your face for customers to see
  • Being strategic with people who owe you money and can’t pay

Creativity can solve every one of these recession problems — you just have to get our of your own way and not feel sorry for yourself. Think about the solution, not the economy and how unfair it might be.

Recessions feel unfair for everybody and that feeling isn’t going to help you bounce back.

A recession shows you your weaknesses

If your thinking is flawed and your mindset is weak, a recession is going to highlight those flaws quickly.

The greatest thing you can learn from a recession is where you are weak and that’s how you can improve in those areas. Out of the 2008 recession, I learned the art of sales and how to convince humans of a business idea. Before the recession, I couldn’t talk to a customer confidently.

This didn’t happen in isolation either. Other colleagues saw my weakness in sales and offered to train me for free on how to communicate better and ultimately close more deals.

Lean into your weaknesses and use a recession to your advantage.

Recessions produce incredible businesses

Our tin pot startup eventually died shortly after the recession and got replaced by an even greater online business.

We needed a recession to realize our old business wasn’t adding any value. We were just copying and pasting stupid strategies and lowering prices beyond what was economical. It was a price play and a stupid one at that.

Out of the recession, we built an entirely new business that employed over one-hundred people. That would never have happened if we didn’t take what we learned in the recession of 2008 and used it to our advantage.

A recession is nothing to be fearful of

You will learn many harsh realities about business in a recession and I for one think that is a good thing. When all the market has ever done is go up for ten years straight, you get complacent — and even lazy.

A recession punches you in the face and tells you to wake up and get over yourself. There are many toxic bosses all over the world, flaunting their egos and destroying companies, that could do with hearing that message.

You don’t need to be fearful in a recession; you need to learn to be selfless.

Help people through their first recession

Many of you have never been through a recession before. This will be your first one. For us oldies, the number one thing we can do is help those around us through their first one.

Helping people through their first recession helps remind you of what you may have forgotten from the last one. It’s a lesson for you as much as it is a lesson for the person you’re guiding through the fear of a recession for the first time.

We talk about fear all the time in personal development — like fear of spiders, public speaking, and heights — yet we rarely talk about the fear that comes from a recession.

The time is now to face our fears and use this recession to be selfless and learn that we are all part of something bigger than ourselves.

During your lifetime, you are going to face many recessions. They happen roughly every 7–10 years and are part of a healthy economic cycle. A recession can teach you many lessons and help point out areas in your life where you’ve become complacent or overconfident.

The guys and gals you see rolling around in leased Lamborghini’s disappear in recessions and trade in their shiny cars for something more modest like a Ford Fiesta. All the fake money and Instagram flashing evaporate into thin air.

Suddenly, the dude telling you you’re stupid and that you need to buy his online course is nowhere to be seen, back to reality, and desperately looking for a 9–5 job.

Don’t hate these people; just understand that ten-year bull markets, where everything goes up, makes people cocky and forgetful.

This next recession is a much-needed reset and a chance for you to thrive in the coming decade. Learn about yourself and your psychology in this recession. Then apply the learnings and grow from there.

Posted on March 28, 2020

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