We live in uncertain times. The world order is shifting faster than we can process — The wars nearby. Right now a looming commodity crisis that I believe markets are underestimating. AI dismantling business models at an incredible pace.
The entrepreneurs I’d bet on right now are not the ones with the highest growth targets.
I would bet on the ones who have built businesses that can take a hit.
A resilient business is profitable and holds cash reserves. Warren Buffett spent decades being mocked for sitting on his cash pile. Then when crisis came, and he was the one doing the buying.
At a minimum, a resilient business is losing less money than the competition.
That’s what happened with my own company 9flats. We had to freeze nearly all expenditure and operate just the core of the business. It was painful. It was also what made it possible for us to acquire the much larger Wimdu — and later sell it.
I’ve turned around businesses four times: bild.de, DocMorris, 9flats, and another.
The pattern is always the same. The signs are visible early. But CEOs don’t admit them to themselves. The team stays delusional longer than you’d believe possible.
A company is the perfect machine for collective optimism — investors need the top-line growth story, management needs to believe in the mission, staff needs to feel they’re building something.
Everyone is incentivized to ignore the warning signs until they can’t.
The ones who survive in these situations are the ones who cut one time deep. Not several times homeopathically. Not because they’re ruthless. Because they understand that a smaller, profitable business is infinitely more valuable than a large one that’s burning cash.
There’s a status culture in entrepreneurship that rewards accumulation: more funding, more headcount, more press, more awards. I’ve never seen a genuinely stable business that makes a lot of noise about the local excellence award.
Resilience doesn’t need to look impressive, it might look boring:
- A regional monopoly.
- A low involvement product.
- Low leverage.
- Cash in the bank.
- Disconnected customer groups that are not all vulnerable at the same time.
- Geographic diversity.
- The ability to say no to things.
When the tide goes out, you will see who has been swimming naked.
What would your business look like if you optimized for survival rather than scale?
