Survive Today to Make an Even Bigger Impact Tomorrow

Where the econ­o­my is head­ed is anyone’s guess.

The U.S. recent­ly post­ed two straight quar­ters of neg­a­tive growth, an unof­fi­cial sig­nal that we had entered a reces­sion, and infla­tion con­tin­ues to grow at its fastest pace since 1981. The S&P 500 was down near­ly 20% through the first half of the year, its worst start since 1970, and the Fed has been rais­ing inter­est rates to try and bring things under con­trol.

In the face of all this macro swirl, it is only nat­ur­al for entre­pre­neurs to be ner­vous. Espe­cial­ly for those in the process of rais­ing mon­ey, these are unchart­ed waters. The last time the U.S. expe­ri­enced a true, drawn out reces­sion was the year-and-a-half long pull­back asso­ci­at­ed with the 2008 finan­cial cri­sis. Many of today’s young entre­pre­neurs weren’t even out of school at that point, let alone expe­ri­enc­ing the ups and downs of main­tain­ing a busi­ness through chop­py eco­nom­ic times.

But just ask the teams of com­pa­nies like Cel­sius, Beyond Meat, Oat­ly and the dozens of oth­ers in bet­ter-for-you CPG that start­ed before or dur­ing the Great Reces­sion. It is not only pos­si­ble to sur­vive an eco­nom­ic down­turn with your impact bonafides intact; it can actu­al­ly help pave the way for longer term suc­cess. At ZICO, we were just about to do a big raise in the Fall of 2008 when investors went com­plete­ly “pen­cils down”. It was a tough 18+ months but we tight­ened our belts, got rad­i­cal­ly focused on exe­cu­tion, and came out of it stronger than ever.

I talk to so many entre­pre­neurs who have big dreams and want to make a big dif­fer­ence in the world. All of them are try­ing to bring bet­ter for you food and bev­er­age prod­ucts to mar­ket and they’re build­ing strong, inno­v­a­tive com­pa­nies to make those dreams hap­pen. But so many of them don’t under­stand the real­i­ty of run­ning a com­pa­ny in this indus­try and the trade-offs that are required in order to just sur­vive, espe­cial­ly when times are tough.

A while back I was talk­ing with Greg Stel­tenpohl, the founder of Cal­i­fia Farms and one of the biggest suc­cess­es in our indus­try, about an expe­ri­ence he had when speak­ing to a group of col­lege stu­dents about entre­pre­neur­ship and busi­ness. The stu­dents were giv­ing him a hard time about the fact that Califia’s prod­ucts came in plas­tic pack­ag­ing – did that real­ly count as sus­tain­able? What was the company’s true car­bon foot­print? 

His response: I’m try­ing to solve the envi­ron­men­tal and eth­i­cal issues around the dairy indus­try, and I’m doing it with great tast­ing, nutri­tious plant-based bev­er­ages that peo­ple love. But I can’t solve it all. Some­one else has to dive in and fig­ure out the pack­ag­ing solu­tion; that’s not my job. It’s yours!

I love that because Greg was a very thought­ful and envi­ron­men­tal­ly con­scious leader, but he knew that he had to choose his lane if he want­ed to accom­plish any­thing. If Cal­i­fia Farms wasn’t suc­cess­ful, then the impact he was shoot­ing for would be noth­ing. He couldn’t do that if he spread him­self too thin try­ing to do every­thing.

It’s this under­stand­ing of where the lines of scale and impact inter­sect that sep­a­rate suc­cess­ful food and bev­er­age com­pa­nies from those that have great ideas but nev­er come to fruition or don’t scale. If you want to make a big impact on the world you need to know how to scale that idea into a large busi­ness, and soon­er or lat­er that requires fig­ur­ing out how to oper­ate suc­cess­ful­ly dur­ing chal­leng­ing times and even­tu­al­ly achieve this age-old busi­ness objec­tive so many entre­pre­neurs seem to for­get: make mon­ey.

Nev­er is this more impor­tant than dur­ing a cri­sis.

Make the safe bet: a reces­sion is com­ing or already here. Accept this real­i­ty and see it as an oppor­tu­ni­ty. Clar­i­fy your vision. Choose where to focus. Be clear about what you will not do. What are your most prof­itable prod­uct lines/customers/channels? What would you do if the cash you have or can raise imme­di­ate­ly is all you ever have? How would you sur­vive? Ensure you have align­ment from the board to your street team; lis­ten, learn and be ready to piv­ot; com­mu­ni­cate with your team, investors, cus­tomers and con­sumers con­stant­ly. Share bad news ear­ly and often.  I love big visions. I love big impact. If you want to make a big impact through your busi­ness (and have the sat­is­fac­tion and rewards of doing so) make sure you stay in the game. I promise you; there will be more than a few mul­ti-bil­lion- dol­lar impact brands in the near future that will look back and say all they tried to do dur­ing this time was sur­vive and that that work posi­tioned them to thrive. The secret to suc­cess in a cri­sis? The same as any­time, just hard­er: nev­er give up.