Emu Bob

Recessions are the Brick Walls We Need to Climb Over

This weekend we were busily packing up our house for an impending move to London. I am moving over for 12 months to help grow Ephox in Europe.

At first glance this may seem like a stupid thing to do given that Britain is facing its worst slump in 60 years. Why on earth is this a good time invest time and money in developing the market there?

The main reason was that brick walls present a challenge that is highly motivating*. I have also had an unshakable belief that great companies are built in difficult times. Warren Buffett has it right when he says to be greedy when others are fearful and fearful when others are greedy.

My wife and I moved to Silicon Valley in August 2002. In the week of October 8, 2002, the NASDAQ composite touched its lowest point of 1,114 and completed its ride down - way down - from its all-time high of 5,132. Over $5 trillion in market value of technology companies had been wiped out.

Was coming to the US at that time a good idea? In hindsight yes it was. The tech market wasn't any easier in Australia at the time and getting a foothold in the Valley was much easier on a shoestring in 2002. We were able to hire staff, rent premises, rent accommodation and much more without resorting to the ridiculous premiums of the dotcom era. My wife was also very lucky to get a job with Qualcomm and had stock options priced at the lowest their stock had been in 10 years. Talk about timing!!

Building a company in a recession can be a good thing for a range of reasons. Many great companies have had their formative years in tough times. I have often said that if we had arrived in the Valley a few years earlier we could easily have raised a ton of VC and long since flamed out. Getting going in the recession really focused our energies on the important things and instilled a profitable growth mentality that most start-ups never get.

Will increasing our investment in Europe - and in the US and Australia - pay off during this recession? Time will tell :)

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*Yes, I have been reading Randy Pausch in The Last Lecture.

The Power of Checklists

Adrian recently wrote of the checklist our developers use before declaring that a bug fix or enhancement is truly finished.

In discussing the benefits of checklists Adrian pointed to an article from the National Review of Medicine about the crusade of a Dr Peter Pronovost. The cause that the John Hopkins professor has taken on is somewhat simple but devastatingly effective. His thesis is that the usage of checklists in Intensive Care Units can dramatically decrease complications and therefore deaths and costs.

Compelled to read on, I discovered a New Yorker article by Atul Gawande offering an in-depth review of what the good Dr Peter has been up to and I highly recommend reading it. In discussing Dr Pronovost's results:

Michigan's infection rates fell so low that its average I.C.U. outperformed ninety per cent of I.C.U.s nationwide. In the Keystone Initiative’s first eighteen months, the hospitals saved an estimated hundred and seventy-five million dollars in costs and more than fifteen hundred lives. The successes have been sustained for almost four years—all because of a stupid little checklist.

His initiative has saved more than fifteen hundred lives in Michigan alone. Do you recall the coverage the so-called 'Subway Hero' Wesley Autrey received last year? He was undoubtedly brave and heroic but where are Dr Pronovost's front page headlines?

When asked how much it would cost for him to do for the whole US what he did for Michigan, he said:

About two million dollars, maybe three, mostly for the technical work of signing up hospitals to participate state by state and coordinating a database to track the results. He’s already devised a plan to do it in all of Spain for less.

When I am unfortunate enough to find myself or a loved one in an emergency room I sure hope they use a checklist. Of all the people in need of funding and support in healthcare research, Dr Pronovost should be at the top of the list.

As Adrian points out, checklists must also be widely applicable to fields beyond medicine. I am sure they would have an impact anywhere where experts are relied on to 'practice an art' yet are busy and stressed. Based upon Dr Pronovost's research, if we all swallowed some humble pie and submitted to a checklist or two the world would be a better place.

I am off to write a checklist or two.