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Seven reasons why it’s a good idea to expand in a recession

Friday, April 24th, 2009

We’re currently hearing nearly every day about some company or other downsizing its workforce, cutting back on services or attempting to lower costs in some way or other. Everyone knows that belt tightening is the only way to go in a recession.

Or is it? Here are seven reasons why it can be advisable to expand, not contract, in a recession.

  1. Because you’re the best at something – You ARE the best at something, aren’t you? Every company has a unique selling point, a reason why people use them and not another firm. Fact is, that companies who are second or third-best at what they do suffer in recessions. But when you know what you’re best at, you have more staying power in that area than anyone else. So locating and playing on your strengths is vital. There’s no point expanding in an area where you are outperformed – the extra clients will cost you dear and acquiring them may push you under.  But expanind where you’re strong is a great move.
  2. Because there are probably areas of your business that appeal to people in a recession – There are many businesses that do well, of course, in recessionary times – pawn shops, discount retailers – but maybe you too have product lines or services that actually become more appealing to your customers at times like these. Having an audit of your current offerings and asking “how can we market this (product or service) in a recession?” may bring about surprising opportunities.
  3. Because customers will remember you when things improve – Smart companies know that if they can stand the cost, marketing in a recession is money well spent. If you are spending money getting your message out there, even if customers are not in a position to buy (which let’s face it, many aren’t) they are getting your message – even more so if everyone else has stopped or reduced their marketing. And many products have a long lead-in from initial interest to purchase anyway, so to NOT spend in a recession could mean that when the good times return, you find yourself with what may on the surface seem to be inexplicably empty order books. The reason is that you didn’t hold firm. So if you can stand it, it’s always good to build your market share in these times and reap the rewards later.
  4. Because your market may not even be in recession – Is your market actually IN recession at all? The fact is that for many markets, recession means a slowing of growth, not a reversal of it. Are you so busy listening to doom, gloom, the media and water-cooler talk that you haven’t realised that your sector is not dipping how you though it would/was? If so, slower expansion DEFINITELY makes more sense than no expansion or contraction.
  5. Because nowadays, marketing is measurable – It’s an oft-quoted line that says “I know half of my marketing budget is wasted, I just don’t know which half”. For a hundred years, marketers have placed newspaper, magazine and (later) radio and TV ads, not knowing which were and weren’t working for them. Fact is though, nowadays that’s all bunkum. In the “new media”, everything is measurable. With pay-per-click advertising, search engine optimisation, online PR, affiliate marketing, email campaigns and social network advertising, you can track the source of every single customer and every single change to your advertising strategy. So of COURSE it is imperative to watch your spend in a recession – but to expand means marketing. Marketing is a utility, not a cost. So do it. Expand your business. Go and find the new customers. Just undertake it more wisely than ever.
  6. Because it’s a chance to up your game – if you’re busy playing damage limitation, your company will almost certainly be suffering at a product or services level. Are you improving your offerings? Your message? Your selling points? You’re doing nothing of the sort, because you’re going backwards.  By deliberately putting the considerable effort in to expand, you will be sharpening your message, and obtaining a competitive edge. Your company will be more alert, more future focused, and ultimately more stable.
  7. Because the competition will be thinking the same – It is vital to adopt a proactive tone in your marketing and in your business, since you can expect the competition to be thinking alike. Not losing more than the market drop overall becomes extremely important. Or, maybe your competitors have not got the same insight into recession marketing, and this costly mistake of theirs can open up a trail for you.

Overall then, the message as we see it is: Don’t stop spending, don’t stop expanding, and don’t stop improving – just do it more wisely than ever.

Open source software: Get your apps for free

Friday, March 20th, 2009

There is growing interest in free software. Anyone who can’t see why is surely not human. Free! That’s as in, you don’t pay a penny for it. It’s yours. Gratis. Have it. In fact, have 10. Give them to your friends, too. Why pay for something if you can have it for nothing?

It’s GOT to be rubbish if they’re giving it away for free, though, yes? There has to be a catch, yes? No?

Well, let me tell you something. I’m writing the copy for this article using a free text editor (Notepad++, since you wondered), which is one of the most popular in its class. In fact, I choose to do a lot of my work here at Reedus using free software (PHP development with NetBeans, transferring files with FileZilla…). One reason is I can always use the same program at home, for free, so there is less of a learning curve. Come to think of it, my wife and I have all our music on iTunes. That’s free too. I can chat to her from my desktop with Skype (don’t tell the boss). For free.

So it isn’t all rubbish. And I’m not seeing any catch.

So your next question could conceivably be “Why?” or maybe “How?” Both good questions. First, though, let’s define the two types of “free” software.

Open source vs free software
So, iTunes is free. Internet Explorer is free too. So is Skype, actually. But they’re not “open source”. They’re owned and protected with the full weight of the law by Apple, Microsoft and eBay respectively. You try reselling “My iTunes – Improved!” or “Costa del Sol Internet Explorer” and see how long you last.

One can easily see the commercial sense in iTunes, Internet Explorer and Skype. iTunes is tied closely to iPods and the iTunes store (both of which definitely aren’t free). Internet Explorer is tied to Windows XP and Vista, again both definitely not free. Skype lets you talk for free but has lots of paid-for extras, only sold by Skype and only compatible with Skype.

What’s open source, then? Basically it is software where the writers (usually working in teams, and for free) have released the “source code” underneath the software so that anyone can take it, improve on it, use it in their own designs, contribute to it, enjoy pulling it apart… you get the idea. Like iTunes, Internet Explorer and Skype, this software won’t cost you a penny to download from the internet and install. But unlike those examples, open source software is free to take and alter, under the terms of an open licence that is not restrictive in the slightest. So there’s the difference.

Did you know the majority of websites are run on servers that use Linux, the open source alternative to Windows? Here at Reedus Design we write most of our website and online applications with PHP and MySQL – an open source programming language and database application respectively. We think it works best. And the fancy entertainment system when you travel transatlantic and watch TV or play a video game on the plane? Linux again (was last time I travelled, anyway. I saw the Linux screen when they booted it up!)

Money for nothing
So what’s the commercial sense in “open source” software? Why design something and give it away for nothing, and not only that, encourage other people to “use and abuse” it?

Well there are lots of reasons, but to me the main one is that with open source software, it is easier to develop and maintain complex software with more of the best minds working on it, wherever they may be and whoever they work for (many open source programmers do it as a hobby, away from the paying job). If 1,000 people spend a day each working on a project (for free), all contributing their individual skills to the parts they’re best at, is that software going to be better than a team of five people (chosen because they happen to work for the development company) working for 200 days on the project?

Same hours, but while the second example may well be representative of the typical software development team in a commercial organisation, the first certainly isn’t. You may assemble a team of five for six months, but a team of 1,000 for an hour apiece? Not going to happen is it?

If many developers are going to need to use a product to achieve other goals, why not share the cost of developing it by all contributing a little time each? They can always go off and use it for commercial reasons individually later on. Just because I am writing this on an open source program (which I didn’t help to develop, by the way!), doesn’t mean I am not going to sell what I write later. (I’m not, it’s on our blog, for free. Free content is another topic though…)

Sharing the responsibility
Let’s move forward. The software is released. It gets used all over the place (it’s free, after all). People find problems, and report them back. Those same 1,000 coders become 2,000 as the software develops. So now 2,000 people are spending a small amount of time each improving the product. Meanwhile, in our commercial team, the five programmers have been broken up to work on other things.

Now, imagine a security loophole is discovered in both pieces of software. It’s bad – people’s PCs are getting infected by a virus because of it. The open source software is pounced on by the whole community (or more likely, the loophole was discovered by one of them before anyone exploited it in the first place). Either way, it’s fixed.

Meanwhile, the commercial software awaits the next round of improvement, assuming it is selling enough for the company that released it to be able to continue supporting it. Or the developing company pays a lot of money to someone to get it fixed, short notice. Either way, not an ideal situation for them. Organised chaos of open source

You might ask how open source software projects could ever be organised with all these disparate programmers. The truth is simple: the internet. That’s made it all possible. And it’s also true to say that in many projects things can get chaotic, with their own politics and organisational oncerns. But remember, this is “open source” – take the code and do what you want with it. Some people may do just that, and break off and do their own thing. So you have two versions of the same software (or three or ten) all with their own devotees.

There are dozens of versions of Linux, the open source operating system. All go for different niches. Some are good, some not so. Depends what you want. But the best are very, very good. And we all know competition is healthy.

So, chaotic? Yes, sometimes. But high quality? Absolutely.

Against this, it’s interesting to note that Microsoft creaked massively under the weight of trying to get Vista out. It stretched even them, as they admitted freely at the time. The first release of the final product underwhelmed many users, who said it felt unfinished – after all those years in the making!

It took many more months to release the upgrade to get it right. Microsoft’s commercial set-up meant they couldn’t so easily court outside help as open source teams do as a matter of routine; they had to find and hire the right people. So it’s not all calm productivity in the commercial sector. A good project can be a good project, whether open source or paid-for.

Where’s this all leading then?
You may feel the world is turning upside down. Not paying for stuff? Crazy!

True, but history can explain it. It is the low distribution costs of the internet that have precipitated all of this. The same is happening with music and films, although illegally right now, especially for films. As record companies rush to rethink their marketing strategies, artists are making money from concerts, posters, T-shirts etc because the music is “free” (though not “open source”! Not usually, anyway). It’s happening for content or editorial – only a third of young adults now read a paper, the majority of the rest getting the same content for free on the internet.

So how does the money get made? Well the clue is in the music model above. If you have an open-source application, you can make your money by selling business-standard support to people who need mission-critical backup in case something goes wrong. Or, you use the open-source base code to make something more specialised, and sell that. Or you sell training programmes to teach people how to use it. Basically, give away the base product and add optional add-ons for fans, specialist users, companies and so on. Sell add-on value to something that is free for all to use.

There are many ways to make a living in the open source software industry. Just not from boxing up the basic stuff, putting it on shelves, marketing it like hell, and selling it for just enough to pay off all your costs and make a profit. Not really so revolutionary when you come to think of it, is it?

IBM don’t think so. They realise the advantages of loosely-organised, highly active open source communities, and in their long-standing cooperation with open-source company Sun Microsystems we see a good example of commercial and open source companies aiding each other. As I write, IBM are looking to buy Sun. They may pay $6.5bn. There’s money in open source, that’s for sure.

Go on, try some open source…
So you’re running XP or Vista at home or work, have Microsoft Office, and Photoshop Elements organising your holiday photos. You’re not open source. You’re positively old school!

If you want to have a go, here are just a few open source alternatives to commercially licensed applications that you could download and try. All are easy to experiment with – you can even try out a new operating system for your PC by burning a “live CD” of, say, Ubuntu (as suggested below) and booting up with the CD in the drive. (Windows will still be there, but for the length of that boot up, your PC will be running Ubuntu.)

Have a play – you may decide for yourself, like millions of others, that free doesn’t have to mean second best.

Office software: Using Microsoft Office?
Try OpenOffice (http://www.openoffice.org)

Web browser: Using Internet Explorer?
Try Firefox (http://www.mozilla-europe.org/en/firefox/)

Operating system: Using Windows XP or Vista?
Try Ubuntu – a popular Linux variant (http://www.ubuntu.com/)

Web page authoring: Using Dreamweaver?
Try Kompozer (http://www.kompozer.net/)

Image/photo software: Using Photoshop?
Try GIMP (http://www.gimp.org/)

 

Phil Morse

Javascript Rantings

Wednesday, March 11th, 2009

It is rare that I rant with such venom, but the current suite of big name websites could learn a thing or two when it comes to Javascript.

Javascript is a great piece of technology that can really enhance the user experience on the web, techniques deemed “ajax” have in fact been around for years, but of late we are really seeing huge possibilities to enhance websites with a generous sprinkling of Javascript, creating more interactive enjoyable websites.

So why am I taking the time to moan?

Browsers normally are quite nice about Javascript errors – they don’t really throw it in your face. Look in the bottom left hand corner of your browser in sites like www.youtube.com and you will find a little yellow triangle with an exclamation mark.  This means there is a javascript error. This in itself would not “get my goat up” as it were.

As a thorough / anal tester of websites I have set my browser to display errors, so I am constantly confronted by boxes like this:

ie7scripterror2

Errors on websites will always occur as we are all human, but Javascript errors should be obvious and fixed. I will be writing to youtube.com to express my concerns.

Rant over.