The first time I said that the current recession is the seventh one of my working life, it was in one of our internal meetings. I noticed many in the audience suppress giggles. "You guys don’t believe me?" I asked.
"You don't look that old," said one.
"You got to be a hundred to have been through seven recessions," said another.
"People survive recessions?" asked yet another.
Then it struck me. If you are 20-something, like most in my audience were, then this must be your first recession. Even if you are in mid-30s, like the rest were, you would have only dim memories of the 2001 recession. It was largely confined to the telecom and Internet industries and, in any case, its effects were mild in India.
The first recession of my adult life was the 1969 one, the year I joined IIM Calcutta. I still wonder whether the grim economic conditions of that recession led to the restiveness in the country in 1969 that led Indira Gandhi to split the Congress Party and set us on a fresh round of socialism.
|Subscription, not advertising, will be the key source of revenue.|
|Web usage will move from PCs to mostly mobile devices.|
The second recession was the 1973 one. What brought it on was a sequence of events: the Arab-Israel war on Yom Kippur day led the oil exporting countries to raise oil prices. This in turn set off inflation worldwide. Central bankers raised interest rates. The economic situation grew so grim that two smart guys and I decided that we'd be better off on our own: We went out and founded Rediffusion, the ad agency. Many advertising clients in India faced with declining sales were ready to listen to our pitches and consider switching to a six-man creative hot-shop. What can we lose, they must have asked themselves; sales are anyway down, so let's try their new-fangled "creative" ads.
The 1980 recession was action-packed: Iranian students stormed the American Embassy and took hostages, the us boycotted the Moscow Olympics, John Lennon was assassinated. Things dragged on like this. I noticed little of this as I was busy experimenting with a new thing called Personal Computer.
If the 1989-90 recession had not forced us to liberalise our economy, we would probably be still muddling along in our old ways. In 2000, I found myself racing against an oncoming recession and breasted the tape for a nasdaq listing a month before the 2001 recession finally hit wrecking many telecom and Internet companies. Whew! I noticed several raised hands in my audience.
"What shall we do in the current recession," asked one. "None of our customers seem to want to buy anything we want to sell them. And even if they buy, they want to haggle prices down." "Recessions are midwives for the birth of a new era", I said. "Let's try guessing what the new era is going to bring with it."
"Web usage will move from pcs to mostly mobile devices," said one.
"Every interaction on the web will have a social component," said another.
"Revenue will come mostly from subscriptions as opposed to mostly advertising," said a third.
We quickly acted on these ideas. Users of our rediff.com website must have noticed a sudden shift to a minimalist, ad-free design, a risky change, something which can be done only in a recession when ad revenues are down anyway. We also stepped up our brand
advertising because during a recession tv ad rates are at a fraction of what they normally are. This recession, like each one before it, is too good an opportunity to waste.
— Ajit Balakrishnan, 61, is the Chairman and CEO, rediff.com