The following is a chapter ("Adaptation") from the book REAL: A Path to Passion, Purpose and Profits in Real Estate. The author of this chapter is Marc Siden, CEO of Onboard Informatics. @marcatonboard
They say the road to true peace is acceptance. Perhaps it’s true that the path to managing through adversity in business follows the same principle. As the co-founder and CEO of a New York City self-funded start-up in its eleventh year in business, I sit in my office reflecting on where the curves in the road took us. It’s easy, in a way, to see where adaptability has taken us. Much has changed in eleven years’ time when I sat in this seat—which was a folding chair at the time—as my partner Jon Bednarsh and I built the business from the ground up, literally, in an East Village basement apartment.Now overlooking the the Lower Manhattan skyline and harbor from my office, we are forever changed by what the market and our hundreds of clients have taught us about being adaptable over the years. My hope is that this chapter channels the lessons and battle scars learned along the way into manageable disciplines that can lead you to great success and profits.
Embrace your realities
A start-up’s reality is bleak. Over 80% of us fail in their first few years. It doesn’t matter if the odds are 80 or 95% against you, if you don’t embrace the reality that today could be your last day in business, you are likely to become a statistic. The urgency and level of commitment that you must bring is hard to put into words. As an avid hockey fan, the best way to describe this notion is to watch the last 2 minutes of a Stanley Cup Game 7. I remember my partner saying to me in the first days of business that if we didn’t sell $60,000 in the next month, we would have to shut down. All of a sudden, we made a sale of $120,000. Why is this?
There is a spark in all of us that we can ignite in such extreme times as we let our future reality hit us. When we find that spark, we focus on our ultimate goal, work at a level of intensity that is abnormal, and tell ourselves that failure is not an option. The end result is a goal with 3 seconds left to send the game to overtime.
Some call it a miracle. I submit that it’s simply true adaptability to the reality of a situation. So much of what we endured would shape our core values, which then formed our culture and identity as a company.
Ask yourself today: what are my core values as a real estate professional? What are our indispensable values as a business? In trying times, that identity can be rattled and rocked to the core many times. It’s up to you to focus on making sure the foundation is solid.
Stick to your core principles
Fast-forward to summer 2007: the credit markets are falling, the sale of our company for millions of dollars falls through as a result and we are hopping on a very wild ride to say the least. Right before the Great Recession, we were a more mature company with 30 employees, making a name for ourselves in the industry.
In early 2007 the phone was ringing with new opportunity almost every day. All of a sudden, we couldn’t get some of our best clients on the phone. Times like these test your relationships and see if you’ll stick to your core principles or make it through the storm.
If you’ve worked with us, you know we built our core culture around genuine relationships. Vendors, clients, and employees are our lifeblood and to tear the fabric of these relationships would be the beginning of the end for us. Unfortunately, many organizations use economic downturns as an excuse to abandon their core ethics and relationships, tarnishing what they’ve built forever.
So how do you stick to your core principles when the walls around you seem to be caving in? Well, it ain’t easy. For us, we started in the wake of adversity and we have some great reference points from the past to rely on. We knew when the phone would ring, it wasn’t going to be someone looking to buy all of our products but likely a hurting client looking to get out of their contract. Rather than stick to the law of contracts written in good times, we felt it best to dig in with our clients and offer them some relief during the recession, asking that they pay us back by extending their contracts.
It was a huge success for a lot of the clients we were able to work with. So while we made some near term sacrifices, we were also able to improve a lot of our relationships, assets that can outlast any recession. We were able to keep afloat for the few tough years. More importantly, we chose not to cut any staff via layoffs. Yes, our bonuses were smaller and holiday parties were less extravagant, but we kept our company culture intact and dug in together to answer the call.
I often think of where we’d be today if we followed the status quo decisions of cutting staff, paying vendors late, and holding our clients to every line item in their contracts. By sticking to our core principles of business and embracing the reality of the times, we stayed nimble, we stayed proactive in current day, and we set ourselves up for a very bright future. Sure enough, in 2013, the phone is ringing again. We are hearing from those same clients who are feeling the economy changing, the credit markets thawing, foreclosures reducing and a bright outlook for the market.
During the recessions we fought through, we lost some great clients and wore out some great employees. In no way am I writing this from my soapbox. We all learned some very valuable lessons–some the hard way. In the end, our core stayed solid and we molded a new ball of clay around it to adapt to the turbulent and unpredictable times.
Embrace your new realities
As I write this, the sun shines again. The stock market is up, unemployment is down, and reports from economists are now bullish on the real estate industry. Part of the excitement of the upswing is realizing that things aren’t going back to the way they were. Recessions change landscapes, they change thinking and they require a tremendous amount of adaptability to yield an optimal outcome. People may be investing again, but the path to ROI is shorter than ever.
For your business, consider: can you bring a greater intensity to your mission every day, even in good times? Could you do more with less?
Adaptability shouldn’t teach us to live in fear and be too safe. We should simply embrace the new realities of our times and formulate our business strategies around them. For me, it was as simple as never forgetting where I came from and staying true to what got me here in the first place.
About The Book
Most real estate books fall short. REAL goes beyond mere tactics and strategies to focus on the core of what really matters - You. In addition to the authors' lessons learned, this book also includes contributions from some of real estate's most influential thought leaders: Marc Siden, Spencer Rascoff, Sherry Chris, Krisstina Wise, and many more.
If building a real estate business that lasts is important to you, this is a book you surely won't want to miss!