Turn A Crisis Into Your Biggest Opportunity
“Never Let a Good Crisis go to Waste.” Winston Churchill
I’m writing about the lessons I’ve learned building successful marketplace businesses — lastminute.com and Trulia — during times of massive economic, societal, and technological change. This is the fourth part of the series.
Once you’ve been in the business world long enough, you begin to anticipate tough times and work through them, which I’ve covered in earlier posts. In fact, many believe that crises are inevitable, and history has proven this time and again. In my experience, in addition to preparing for the worst, if companies react quickly they can use the conditions created by a downturn to create an advantage against the competition. While it might appear ungentlemanly to kick someone when they are down or exploit another’s weakness, the reality is you are fighting for survival and you will likely find no better time to achieve market share gains.
At Trulia, while the housing crisis escalated we were concerned as we saw home prices plummeting, sales grind to a halt and eventually a wave of foreclosures across the country. The marketplace shifted rapidly and we had to completely reassess our plans. In response, we re-orientated our site in multiple ways to help serve the value conscious home shopper. One example was to integrate the first foreclosure search on a real estate site, to meet growing demand for this type of information.
Trulia generated reports and data to help home buyers understand the new realities of the market and find bargains. The media was craving information to try to navigate the volatile industry at the center of the economic crisis and we (along with Zillow, our rival at the time) gave them unique data and expert analysis. Over time we built consumer awareness, trust, and loyalty by changing our approach. Meanwhile, incumbents struggled, nervous to face the realities head on or spend their efforts dealing with re-tooling their legacy businesses.
Over time, Trulia increasingly became a trusted source of unbiased real estate information, and an essential tool for consumers looking for a new home. Trulia reported over 54 million unique visitors per month in 2014, shortly before the Zillow acquisition was officially announced.
Organizationally, throughout our growth we found that whenever we made mistakes or uncovered customer problems they created a unique opportunity to have “teachable moments” to share with the team and help us to raise our game. For instance when a customer left us, rather than try to keep it quiet, we embraced it and shared the news widely with the entire company. Sharing customer problems and embracing failure gave the team the awareness and information they needed to fix problems and prevent them from happening again. It galvanized our team and helped them focus on the most important opportunities and problems our customers were facing.
At lastminute.com we leveraged our scale and vast unsold inventory to partner with suppliers and stage huge events that drove engagement and buzz during the recession in 2001–2002. We auctioned off entire Eurostar trains at bargain prices, and they sold out in minutes, which helped to build massive awareness and buzz.
lastminute.com also acquired a large number of private online travel businesses all across Europe that had no exit opportunities after the dotcom implosion. We were fortunate to have raised enough money to be able to do this and we aggressively grew through acquisitions when companies were looking for a lifeline. We were able to build scale through an aggressive growth strategy, while many others retrenched.
At both Trulia and lastminute.com, we used crises to gain an advantage against incumbents who were unable or unwilling to act, and gain critical ground.
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