Welcome to 2016! Now that the holiday hangover is past us and we’ve had time to reflect on the last year in business, here are three lessons that we’ve learned from 2015 that you can apply to your business in 2016.
Beware the Unicorns
In Silicon Valley, it appears that the Gold Rush is alive and kicking. But this time, instead of enterprising settlers and wily prospectors, the rush is being led by deep-pocketed VCs that are searching for unicorns – private companies that hit a valuation of $1 billion, (unfortunately) not the mythical beast – didn’t slow down in 2015, and it seems to be picking up speed.
Currently, there are 143 unicorns valued at $524 billion which includes companies such as DropBox and DocuSign. However, the mad, quixotic rush to be an early investor in the next big thing has led to broken business models, companies overvalued, and painful realities.
Take the example of LivingSocial, which was brilliantly profiled in The New York Times. LivingSocial is a daily coupon site (like GroupOn) that probably sent lots of deals to your inbox a few years ago. The concept was simple: the company matches customers to local businesses via coupons for stuff like 2 for 1 restaurant deals and spa coupons.
Daily deals sites were so popular in 2011 that LivingSocial raised $800 million by the end of the year and was valued at $4.5 billion. However, the company wasn’t making money: in 2011 it took in a revenue of $238 million while taking in a net loss of -$499 million.
Fast forward to the present, the company’s revenues are above its losses, but at a great cost. Rounds of layoffs, selling off properties, and other difficult measures were necessary to bring the company back to reality.
So what do you do? That’s the problem with unicorn companies (and the tech world in general): it’s incredibly tempting to take quick VC cash fueled by dreams and potential, but the hard truth is that if your company doesn’t know how to make money on its own, it will likely struggle to survive or you’ll lose control of it. Obviously there are exceptions to the rule, but instead focus on making sure that your company has attainable goals and could survive on its own without the VC cash. That will likely be a struggle, but ultimately it will build a good foundation for your company should it ever take on investors.
And if you’re thinking this all sounds familiar, people are already thinking about what will happen after the potential bubble bursts.
Get coding or get left behind
Everybody agrees that at least understanding the basics of coding is probably necessary to work in the future. The good news is that it’s a lot easier than in the past to find options to help teach you. But before you get started, I highly recommend that you read Paul Ford’s piece “WHAT IS CODE?”. It’s an excellent introduction into the world of coding that is easy to read and a great piece of storytelling. Make sure you take some time to read it; it’s 38,000 words and contains interactive elements to help explain the topic.
And as GetApp’s Karen McCandless wrote, learning to code takes patience and hard work, but by offering classes at your company, the benefits could be profound. She also notes that companies will have lots of access to Big Data (e.g. lots of data about their customers habits) and having employees that are comfortable with coding is a great way to analyze that information.
So what do you do? A good place to get employees comfortable with these types of classes could be by using LMS software to train employees, rather than traditional meetings. Ask your employees (after explaining the benefits) if anyone has an interest in coding and go from there.
Facebook was insanely successful in 2015, and you need to take advantage of that
For all of the shade thrown Zuckerberg’s way, the omnipresent overlord of your digital life managed to have a hell of a year. WhatsApp’s growth has been phenomenal: when it was acquired by Facebook in 2014 it had 465 million users, as of September 15 WhatsApp has grown its user base to a mind-boggling 900 million. Instagram is also no joke and the photo-snapping social network popular with celebrities and food photographers now has 400 million users.
And there’s Facebook which stands at 1.55 billion active users and it achieved a new milestone when, in August of 2015, one billion people used Facebook in a single day. To put that in perspective: one in seven people on the planet used Facebook on that day.
But what’s most impressive is how well Facebook has been able to monetize video and advertising in general. Year after year, Facebook has been able to sell more ads as well as charge more for them. So much so, that Facebook’s market cap stands at approximately $308 billion, making it worth Intel and Cisco combined.
If you are thinking about getting your business a stronger presence on Facebook, consider spreading your brand via video. As it stands, Facebook gets about 8 billion daily video views and stands as a legitimate alternative to Youtube (worth noting: Youtube counts a view as 30 seconds, while Facebook counts a view as 3). Oh, and after many years of unofficially being a significant part of work life/time, it looks like Facebook is coming to your work too.
But don’t worry about his overreach in 2016: he’s announced that he’s taking 2 months off to spend with his family and newborn…and to design a personal assistant A.I. somewhat similar to “Jarvis” from Iron Man.
So what do you do? It’s easy and understandable to be opposed to using one of his properties, but embrace it! Make sure that your company is represented on Facebook or Instagram. There are also plenty of tools to help you manage your page such as social media marketing software. Advertisements on Facebook are affordable, even for small businesses, and certainly it wouldn’t hurt to have someone on your staff that’s comfortable with producing videos.