When in doubt, just survive
Lessons from ancient downturns
As the White House was announcing tariffs on the world last week, I was walking around the remains of an ancient civilization in Malta. It felt intensely appropriate to be looking at these huge megalithic structures, built at least 5000yrs ago with a vast concentration of resources but which is mostly incoherent to us today.
While a lot of people are comparing what’s happening to the 1930s, I’m actually more reminded of the collapse of the Mediterranean trading network in 1177BC which led to A Very Bad Time for Everyone. At that point, there was a very high density of commerce between various states including the Egyptians, Babylonians, Greeks and Minoans. The decline was relatively fast and brutal: most of these trading civilizations crumbled, cities were abandoned and a lot of technological advances (e.g. writing systems, bronze production) were lost. Eric Cline has written brilliantly (and concisely) on this topic. Trading volume masked fragility in the system, a lesson that all societies seem to require a reminder of every few decades.
I’ve probably had close to fifty calls with investors and founders since the events of last week and the only real consensus is that nobody knows anything but any predictions for 2025 have been squarely moved into 2026.
I wouldn’t call this advice but for founders running companies, it might be worth bearing some of the following points in mind:
The obvious (and unchanged): The two biggest assets to have right now are growth and cash (either through EBITDA converting to cashflow, preferably, or cash on the balance sheet)
If you have VCs on your cap table, you should assume they are equally stressed about returning cash to their investors. Any deal that can do that will certainly get some attention
As with VC, companies are barbelling into at-scale dominance or seedstrapped profitable teams. The success probabilities for anything between those two points gets lower by the day (and I mean that for the VC asset class too)
I have a bias towards M&A (at least as a strategy check) but this is certainly the best environment for doing deals since GFC. Every responsible board should have a landscape chart with opportunities.
Don’t be afraid to take radical action. If you find yourself struggling to do what needs to be done, find some outside help
I lost the fear/the first time that I lost my career/I’ll be back every year
Mark B and Blade ‘We’ll Survive’
Reading
I like Byrne Hobart a lot but I’m struggling with his book on the utility of economic bubbles. It’s clever but just feels a bit too much like marketing material for VCs. You should still read it though.
There was a pretty significant Denisovan find in Taiwan.
Mike Shields has a good breakdown of this year’s Playfronts, the annual celebration of advertising and video games failing to hit it off. Actually this year it felt like some movement was happening.
I am of course still reading The Power Broker.