Wednesday, November 5, 2008

Some personal thought about the current crisis

The economy fluctuates. It's actually a part of the bigger truth saying "the only constant thing is change". As with every change coming, you can either fight it or embrace it. Since fighting many times does no good, IMO one should embrace change and see how to get accustomed to new situations as they arise.

Colnect is embracing the change in the economy. So far it has maintained a positive cash flow and will continue to do so in the future. Now is probably not the time for big spendings or risk takings. Now is the time to spend less but do more with the resources available.

An interesting campaign I've came across made me even more aware of how some companies (as well as some people) do not try to prepare for a gloomier future although the writings are clearly on the wall. The campaign was for mobuzz.tv, which I haven't known before. Apparently, they're burning 50 grands a month in producing 5 daily shows a day and now they're vying for donations because they've ran out of money. They expect to raise Euro 120K in one week with donations of 5 Euro. Yes, they really expect 24,000 people to donate them 5 Euro each in a week. They just need it for 3 months and then they'll get the funding they need.

Pardon me cynicism, but I'm not even sure that FaceBook, with its huge worldwide users community, would have been able to raise 24,000 donations in a week. There are probably much sadder things happening in the world today to which one would donate. Skinning living dogs & cats is one of them.

The truth is that although I have no idea about mobuzz's business, it seems (at least on the surface of it) that someone there has not done a brilliant job planning the business side of the company. How do you get to run out of money in a week? Can't you tell when you have only 6 more months to live and then do your best to raise capital alongside with cutting expenses sharp? How can you be sure to get funding in 3 month? In a happy market you can't be sure about it, so now?

The technical side might have flows as well since there was no link to their shows to see what it is we're supposed to help with. Also, the video took very long to load.

My guess is that mobuzz isn't the only company that's about to close its doors soon due to problematic financial planning. As times get rough, survival of the fittest prevails once more. Heed the warnings out there and be ready for the future. Every storm eventually ends. Good luck to everyone.

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