Ted Offers Advice on Navigating the Financial Crisis

As world markets continue their volatile tumble, the impact of the financial crisis is being felt in the corridors of our own Beltway region. There is no regional immunity from the tough economic climate but, according to Ted Leonsis, there are methods of navigation that will reduce its impact.  We caught up with Ted Leonsis, Washington Caps owner and Vice Chairman Emeritus of AOL, who tells us how to do just that. Click here to read the details of his tips for CEOs who not only want to survive, but thrive!

Have you heard of the “Card Check Bill”?

The U.S. Chamber of Commerce has chosen to highlight the potential problems with the Employee Free Choice Act (H.R. 800, S. 1041), better known as the Card Check Bill.  The main purpose of this bill is to allow unions to organize more easily.  However, the U.S. Chamber of Commerce is concerned because unions would no longer be required to administer a secret ballot determining if employees want to be unionized; rather, the unions would be allowed to collect “authorization cards” directly from the employees. Read more about the Chamber of Commerce’s position here.

Representing America’s union workers, the AFL-CIO has a different position.  The AFL-CIO believes that the majority of American workers would like to have union representation, and are regularly impeded by their employers.  Read more about the AFL-CIO’s perspective here.

Do you know Jim Geiger of Unisys?

ExecutiveBiz recently had the opportunity to sit down with Unisys Federal’s Jim Geiger, Vice President and Managing Partner, Department of Defense.  Jim is known for his remarkable understanding of the ins and outs of the Department of Defense and has an impressive track record of driving growth.  Jim shared his thoughts on the future of the DOD space and how important building your personal brand is to your business.  Click here to read more!

Virginia Governor Tim Kaine Headlines Potomac Officers Club Event  

On Tuesday, October 29, 2008, the Potomac Officers Club welcomed Virginia Governor Tim Kaine, Virginia Secretary of Technology Aneesh Chopra and Rock Creek Partners Managing Director and Obama Technology Advisor Julius Genachowski.  They spoke to a crowd of a few hundred local executives on a variety of issues, but most notably recognizing Virginia’s technological growth and what’s in store for the region’s technology future.  Read more about this event.

These could charitably be called uncertain times. Among those feeling the heat of the financial meltdown are Washington, DC area companies that face the tricky task of balancing their existing customer base with business development. So, how can companies weather the financial storm and still see their businesses grow? For answers, we went straight to Ted Leonsis, vice chairman emeritus of AOL. Leonsis offers a six-point plan that — by his estimation — every CEO at every company needs to put in place right now. Here’s a rundown:

• Forget the long-term and focus on the next 18 months. “Too many business plans have growth coming in Year 2, Year 3 …  and that’s when you get the cash flow profitability for start-ups — all those plans have to be thrown out the window with a focus on cash-flow profitability now being central to any business case,” says Leonsis, adding, “Growth for growth’s sake is no longer in fashion.”
• Cash is now king. Those companies that have cash not only will be able to weather through current credit issues, they’ll also be able to consolidate companies that are less solvent than they are. “So, I think you’ll see some real opportunities where cash-rich companies will be able to buy and merge with great companies that just didn’t get financed or for whatever reason didn’t have the wherewithal to raise money at the time it was needed,” says Leonsis.
• Double-down and focus on your existing customer relationships. It’s expensive to get a new customer — and your most profitable customers are your existing ones.  “Getting into deeper, more profitable relationships with your existing base — and hunkering down with them — is a wise course of action,” says Leonsis.
• Raise monies today — and keep your pride in check. “There’s money to be had, it’s just that the terms are much more onerous — entrepreneurs will have to keep their pride in check and not worry about valuations,” says Leonsis. “Right now many funds and most individuals’ portfolios are down significantly and it would be naive to think that valuations of many companies haven’t been affected right now,” he adds. So, Leonsis’s advice: take the money and don’t worry about the valuation.
• Look at your business with a third-party critical eye. Look at what is “must-have” versus “what’s nice to have.” If you have three product lines, and one is very profitable, one is marginally profitable, and another one is just being rolled out and is eating cash — even if you like the product and customers like the product — it’s time to either go to one product or two products, says Leonsis. “The ‘nice to have’s’ in your business are no longer financeable,” he says, “and every CEO has to be really hypercritical on what they really need to get to the next phase of their business.”
• Be brutally honest and ask yourself: Is your company going to make it? “We’re in that time period where it will be survival of the fittest, so I can see some people who have cash literally almost stopping operations now — getting things down to the bare bones — just to wait until it gets better,” says Leonsis. “Because if you run business as usual you will run out of gas and be out of business,” he adds. Leonsis offers a scenario: A lot of times entrepreneurs, through force of will, will try to make a venture happen. So, let’s say an entrepreneur has $1 million in the bank, and he’s losing $100,000 a month. But his business plan says that by Month 6, he’ll be losing $50,000 a month. The entrepreneur needs to ask himself now: Is that outcome really going to happen? If not — because sales may be affected now — the entrepreneur might be better off keeping that $1 million, stop marketing his product, and retool the business. “So, have 10 people in the company and try to figure out how to live to fight another day,” says Leonsis.

Who are the top entrepreneurs in the Washington, DC area? Ernst & Young recently announced the winners for the Ernst &Young Entrepreneur Of The Year award in Greater Washington. The group of entrepreneurs — eight in all — were selected by an independent judging panel made up of regional business, academic and community leaders, and their names were revealed at a recent gala event at the Ritz-Carlton, Tysons Corner.

“We heartily congratulate this year’s winners on their success,” said Rene Salas, Ernst & Young Entrepreneur Of The Year Program Director for Greater Washington. “The Entrepreneur Of The Year award recognizes all of the hard work, ingenuity and care these leaders have put into building and improving their businesses and communities. This group of winners is truly remarkable for all that they have accomplished.”

The Greater Washington winners for the Ernst & Young Entrepreneur Of The Year award in 2008 are: Jim Abdo of ABDO Development, Magid M. Abraham, Ph.D. and Gian M. Fulgoni of comScore, Inc., Tom Adams of Rosetta Stone, David G. Bostwick, MD, of Bostwick Laboratories, Inc., Seth Goldman of Honest Tea, Ron Packard of K12 Inc., and Dennis Ratner of Ratner Companies.

This year, the Entrepreneur Of The Year awards program celebrates its 22nd anniversary. The program has expanded through the years to recognize business leaders in over 135 cities in 50 countries throughout the world, including right here in Washington, DC. Regional award winners will be eligible for consideration in the Ernst & Young Entrepreneur Of The Year 2008 national program.

In addition to announcing several industry winners, a special Master Entrepreneur Award was presented to Ted Leonsis in recognition of his entrepreneurial endeavors and impact on the Greater Washington area. AOL Founder and former Ernst & Young Entrepreneur Of The Year award winner Steve Case presented Ted with the honor.

No where is the changing online landscape more apparent than in the newsrooms of the major daily newspapers across the country. With more competition for attention than ever before, reporters and editors are struggling to create a product that both adds value to the collective conversation and is financially sustainable.

The 2008 Annual Report on the State of Journalism, conducted by the Project for Journalism Excellence highlighted that last year, despite efforts to partner with web 2.0 companies, many news organizations struggled to grow in this online space.

Unlike some other popular Web sites, online news providers are not financially capitalizing on the growing digital audiences. Despite the increase in digital readership, the news sites seem to be stuck in the old delivery model common with traditional print outlets.

AOL Executive Ted Leonsis recently published a 10 Point Plan to Reinvent The Newspaper Business. His first point is for newspapers executives to “get out of the newspaper business,” rather those execs “should turn over the reigns to young execs, women and people with diverse backgrounds, who are web based and new consumer savvy and will NOT be wed and enamored with the print-based delivery system of the past.”

Read the rest of this entry »

Washington area golfers looking for an extra layer of corporate exclusivity have a new course to call home. The Presidential, a new course set to open in Dulles, has adopted a unique corporate-only membership policy providing its golfers elite access to the region’s most exclusive clients.

While some other clubs frown on the practice of turning the sport into a board meeting, the Presidential encourages that members bring clients to the course. “That’s a unique position and they’re making no bones about it — come and do business here, use it as your business’s office if you want, come and bring clients,” Ted Leonsis said in a recent Washington Post article.

Read the rest of this entry »

Last week, San Francisco hosted the fourth annual Web 2.0 Summit. The event wrapped up on Friday and with over 100 featured speakers, from Tim O’Reilly to ebay CEO Meg Whitman, there was a lot of related news coverage. For a full report on what’s become a yearly west coast tradition, visit the news and coverage section on the event website.

Microsoft CEO Steve Ballmer made waves when he announced that Microsoft plans to purchase 20 web companies a year for the next five years, pledging to spend between $50 million and $1 billion on each of the prospective companies.

“Those will be good acquisitions, and they’re important to us,” Ballmer said. “And they’re of strategic importance.”

Open source developers may also be on the table, according to Ballmer. “We will buy smaller companies. We will buy smaller companies that make some use of open source software,” he said, according to CNET. “We don’t want to discourage people who would talk with us just because they do some open source.” Ballmer even went so far as to offered his email address for any interested developers looking to sell.

Here’s a clip of the Ballmer interview from the Web 2.0 Summit:

Click To Play

Ted Leonsis and Om Malik, featured speakers at the summit, will also be at the New New Internet’s Web 2.0 event, this November 1st. While San Francisco’s Web 2.0 Summit was mainly focused on the technology behind many of the popular web 2.0 applications, the New New Internet’s conference will focus on the implication for business and government.

Leonsis, Vice Chairman of AOL, will be the featured morning keynote while Malik, founder and Chief Blogger of GigaOm, will be the featured afternoon keynote speaker. Like the Web 2.0 Summit event, the November 1st event will host a number of speakers and exhibitors who are at the forefront of the web.

If you missed the event in San Francisco, and will be on the east coast on November 1st, it’s not too late to register for this region’s major annual web conference.

Other interesting notes from the Web 2.0 Summit:

News Corp’s Robert Murdoch calls Google both a “threat and a friend” and Facebook “cool, but not that cool.”

Facebook CEO predicts he’ll double his workforce over the next year alone;

AT&T plans to participate in a government auction of the 700-megahertz band that will be available after broadcast television networks switch to digital from analog in 2009.

Ted Leonsis, Washington Capitals owner and Vice Chairman of America Online, Inc has agreed to be the keynote speaker at New New Internet’s Web 2.0 for Business Conference this November.

Ted doesn’t just give lip service to social media tools like blogging. He lives and breathes Web 2.0. His blog, Ted’s Take, is a perfect example of how blogging should be practiced.

There are many C-level bloggers out there and more joining the conversation everyday. All too often these blogs are simply reworked press releases or stale talking points. The content on Ted’s blog is an honest look inside AOL, the Washington Capitals, or whatever else is on his mind. There’s a steady flow of continuously updated content that’s interesting, honest, and engaging. It’s refreshing to get such a transparent perspective and it’s something that can really only be achieved through blogging.

Here’s Ted on why he started his blog:

“A blog can be entertaining, it can be informational, and it can be enlightening. But the most important part of a blog is that it can be activating. It allows others to look at your thoughts and follow your life and then launch their own ideas, comments and perspectives on what you’ve seen and done.”

That spirit of online collaboration is what makes his blog so popular and why we’re thrilled to have such a social media expert join us for the New New Internet, Web 2.0 for Business Conference. Click here to register and be sure to post your comments on Ted Leonsis or any of your favorite blogging experts in the Washington D.C. area.