I was writing an entirely different post when I got sidelined with a thought… Has there been any other era since the web began its existence as a medium where a company's website has been more critical to its survival? I'd wager to say absolutely not. Have we ever been so dependent on all things digital to get through our days? I don't think so. Without hesitation, I say, if this pandemic happened 30 years ago, we'd be in much worse shape than we are today. While large parts of our economy are right now dramatically slowed down, we should also think to all of the businesses that are still open and operating normally thanks to digital advances, or other companies that are at least scraping by because the internet has made their products easier to distribute. Thank goodness this all happened now!
I, like many, have had a lot of time on my hands lately to think about our industry and how things have and will change since all of this began. And, in some cases, I look back and think that for so many businesses, they have wasted time focusing on so many things that don't matter. And now, I can't believe those decisions have left them in the right place.
I'm going to start by airing my grievances (this is a subtle reference to Jerry Stiller, who we sadly lost this week) with companies that invested in so many silly things over the past ten years. In a lot of ways, my mentality never really adjusted after the 2008 financial crisis. I've never been able to shake the idea that the economy was in a tenious place. If you asked me my opinion in the last few years, I'd probably speak of the economy in terms of "it being in a challenging position." This led to a more conservative approach to my business and focusing on things that were more important versus overinvesting in the bells and whistles that so many were preoccupied with.
I'll start with office space! I wrote many years ago about an experience where we were invited to a publicly-traded company in New York City to pitch our services. The office was near Times Square... I would estimate they must have had at least 10,000 square feet if not double that. Their office space alone was probably costing them almost a million dollars per year. To put it in perspective, it was a "class-A" building, and they had a staircase within the unit from one floor to the next. This was easily something that would cost $70 per foot – at least!
The office was decked out with the best quality furniture. Knoll chairs, big TV's and projectors. Glass everywhere. They spared no expense. It was out of central casting.
Everything was top-shelf until we talked about their website. While I recount the story in this post more vividly, rest assured, this global enterprise wanted to spin out their new website by having agencies design it for free (spec work!) and on a budget of $25,000.
To put this in perspective, this means they valued their website less than 357 square feet of office space. That is barely a conference room.
I wonder how they are doing today – I searched for an hour through old emails and calendar appointments to try to see who they even were, and I haven't been able to find it. I forget – a side effect of having done this for too long. Now it's just a fun story to tell. But I fear that for them, they are paying for those choices now.
I see the same waste with so many other digital agencies. Some of my competitive agencies invested in office space in Brooklyn, San Francisco, and some of the other high-priced areas in the country. They need to charge rates of $200 to $250 per hour and up just to break even. What good is all of that now?
I've always taken the mentality of "less is more" when it comes to office space. I almost fell victim to this myself: earlier this year, we were negotiating to buy an office building… I guess I can put that plan on hold! In fact, I question whether we even need an office at all, other than for the occasional client meeting or to have a place to escape the house. I doubt that any customer is ever going to determine if we are worth working with based on our office space. In retrospect, when we downsized in 2018 and bought our current office, it may have been the best thing we did. It was smaller, affordable, a fixed cost that won't increase because we own it. I'm pretty happy with that choice.
Here's another story I love to tell. We once had a client here in New Jersey – when we went to their office, there was a variety of Land Rovers and BMWs parked outside. Now, there is nothing wrong with that – I have a Tesla and love it. I'm never one for saying that you shouldn't partake in an experience that you really want…! That's one of the perks of living, right? But, it should set the tone for where this is going. Inside the office had a waterfall feature, giant Terracotta warriors, and brand-new bathrooms (with questionable periodicals in there…) featuring the most expensive fixtures. These folks manufactured a product that easily could go direct to consumers, but for now, they were selling to distributors. That's the way they always did it – so why change?
They scoffed at a $20,000 e-commerce platform. Imagine if they had stuck through with it. Today, all of their distributors are non-essential. I can't imagine things are going well. Digital offered them a low-cost way to diversify, and they floundered it. All for something that costs less than one-quarter of one of the cars in the parking lot.
I just think – what is so risky about expanding to digital channels? What is it about the internet that makes people deride the importance of the medium so much in their heads? The more I contemplate it, the more I realize that it isn't the "risk" per se. They just didn't value it appropriately. "Websites are easy! My nephew can do it!" <<shrug>>
Look – I realize that no one could have seen this crisis coming (though, I guess some did…). But geez, how did everyone get so wasteful, focused on things that matter not while opportunities were right in front of them? And, should we have any sympathy for them now?
Today, all of that office space is empty. Employees are racing to get back to work last. On that note, if I may quickly digress, I noticed another area of excess in the last few years was over-employment. I was always amazed at how fast and furious companies were hiring people, in some cases of limited experience, to bolster headcount and fill all those fancy offices. I wonder if all of those new hires can prove their value in an environment away from the office, where work product carries more weight. And, is it crazy to say that perhaps this crisis has given some companies a reason to cut back on all of that irrational hiring? Perhaps... This makes for fun fodder, but let me get back to the overall point.
So here we are, with everything turned upside down. Distribution channels are challenged, employees are home and we're all left scrambling to adjust. It's natural to ask - did we miss our chance to transform?
I don't think so. In fact, now is the time to reinvest, because many people (such as your competitors) still have no idea what is going on. Too many people still believe that we'll be back to normal sooner rather than later, and again are not taking the risk to expand their digital empire. But this is foolish, in more than a few ways.
I'm going to take a pessimistic yet optimistic view at the same time about that position. First, we all know this will pass, and we will all get through the outbreak of the virus. We'll most likely have a vaccine, and we'll most likely also have therapeutic treatments to minimize the effects if you do catch the bug. That's me being an optimist.
But – things will change forever. And so much of that will be around consumer behavior. The direct-to-consumer model will thrive for a long time. And because of that, now is a time to invest. Because regardless of normalcy or a new normal, digital is now the most critical medium that exists. Everything else is secondary. This goes for all businesses – even the bagel shop up the street would benefit from a digital workflow that enables fast, easy, and contactless customer transactions.
Hopefully, by now, you've learned the key lesson here: Websites are the new mailman. Neither rain, nor shine, nor snow, nor pandemic:
Your Website Never Quits!
That's the first thing you must realize.
In times like this – your company's only viable presence is its website. You haven't got anything else. It's all that matters. Your clients, customers, employees & prospective employees, competitors – all they can do to see what you are up to is your website. What impression does it give?
If you compare your website to the competition – who is winning the credibility game? Who is making an impression of confidence and security? Who is capturing valuable user data?
If it ain't you, then it's time to refocus your efforts!
Now more than ever, you need to be killing it online. It's not too late to catch up. And it's never too late to interrupt.
So let's all get to work.