When I look around, I do not like what I see. My perception is that nothing is working the way it should be, and strong measures are long overdue if the malaise is to change. People seem to be living on entertainment and social media while waiting for things to improve. Hope and euphoria alternate with discouragement and despair. Neither is not the right answer; nor is procrastination and indecision. Disconnects cannot be resolved by throwing gasoline on a fire when less of something else would be more appropriate. It is time to face realities and stop rehashing the same things over and over again without providing answers. Desperate times require desperate, or at least innovative, measures. They also require a consensus.
For those who don’t get it, Main Street is in the toilet. Everywhere I look, I see businesses closed that I depended on for many years and their space vacant for months, if not years. One of my favorites had survived the Great Depression. At the same time, even with financing, new shops have difficulty opening due to bureaucratic red tape and difficulties getting services connected and equipment delivered and installed. They could be providing new jobs. It is also no wonder that large retailers are doing poorly and closing stores when consumers learn from them and then buy from competitors on the Internet. What are the limits to this punishment? What will the Internet sellers do when they drive everyone else out of business? Keep prices low? I doubt it! There needs to be a way to resolve these inequities.
As students get ready to go off to college and the unemployed ponder futures without jobs, I wonder what they are thinking. Are they prepared to add more debt with no hope of getting a job if they are studying the wrong things or don’t already have marketable skills and experience? Could it be that outdated teachers are passing along outdated information? What about all the technical wonders that sit idle or are underutilized because someone bought ahead of their needs or failed to understand how to get a reasonable return on their investment before obsolescence set in. Can we really afford to squander resources like that?
Could social media be the next bubble? Perhaps. Social media has probably been oversold, and now that there is so much competition, a major consolidation could occur anytime. For me, it is difficult to decide which horse to bet on after years of mixed results and false starts. Although lots of people use social media to share experiences, from a business perspective, I have not been satisfied. It is too difficult for small businesses with small marketing budgets to gain traction solely because a few people happen to “like” them on facebook. It is important to leverage new capabilities, but do so cautiously.
To put this subject in perspective, I have checked information about facebook on a financial website. Their Initial Public Offering (IPO) was in mid-May (2012). Price started about $42 and went as high as $45 soon after the IPO. The stock was as low as $25-3/4 in early June. Since then, there was a high about 33. Monday (7/23), it closed at $28.75. Today (Friday, July 27) it dropped to about 22-1/2, an all-time low, for a total loss from the high of 50 percent after disappointing estimates of future earnings before recovering to $23.71 at the closing.
With this in mind, I am more convinced than ever about social media being oversold. I believe that it is important to hedge bets in the stock market, but also for a business to diversify itself by creating a winning combination of social media, e-commerce and traditional marketing and sales.
For a new business with an innovative new product, my first challenge has been to convince customers that they need something they have not already considered. I look for a way to link what they already
know and accept to the new and different. An innovative solution that provides added value and benefits may be wonderful, but it still needs to compete against the tried and true. This provides a difficult challenge that many consumers and small businesses need to solve before committing too far, too fast to anything whether it is staying with the status quo or innovating. Careful deliberation will improve outcomes, avoiding disconnect and disappointment.