We already saw AdBrite laid off 40 of its 100 employees, and I think this is going to be a continuing trend as we’ve already seen Sequoia tell its’ portfolio ‘RIP Good Times‘.

Not All of these layoffs mean the company isn’t do well. Sometimes layoffs can be good for the company, if they’ve been pursuing strategies or product lines that aren’t producing, hard economic times can be good instigators to turn companies around.

Pandora Lays Off 20

Here is the quote from Tim (founder):

This is a very sad day for Pandora, and for me personally. Today we reduced our staff from 140 to 120 employees. Like virtually every company, Pandora is not immune to the challenges presented by the current economic turmoil. We are trying to react quickly and responsibly to the new environment.

We cherish our employees. We have painstakingly built a team that I am tremendously proud of – there’s not a person in our company who hasn’t contributed substantially to what we do, and who we are. The twenty folks we let go today were no exception.

I started this company nine years ago. I lived through some very tough times back in 2001-2002. But letting go of an employee will, for me at least, always be the most gut-wrenching thing there is. We tried our best today to treat these friends and colleagues with great understanding, and with as much financial support for their transition as we can afford.

There are tough times ahead for the economy, but our listenership is growing rapidly, the Internet radio royalty rate resolution seems finally near, and the explosion of mobile devices like the iPhone are opening up a world of opportunity for internet radio to expand off the desktop. Moreover, our ad sales are growing so well that, not only did we not make any reductions there, we need to continue to hire more.

It’s just hard to be excited about all that today.

This weekend at the movie theatre I was sitting back in my seat, and my wallet fell out. After I got back to the car, I couldn’t find my wallet anywhere.

So in this situation, I had about $100 in my wallet. I would have lost $100, and someone would have made $100.

There is Always a Winner and a Loser

If I sell my car for $5,000 and it’s actually worth $7,000, then I lost $2,000 in the transaction and the buyer gained $2,000.

If a stock is bought for $20, and then is sold for $10, there is $10 lost in the transaction. $10 goes to the company, who spends this money on something.

Where does this $10 go? Who has the $10?

Who Has All The Money?

Do the CEOs have all this money? What about the employees of the companies? What about the company’s suppliers? Their contractors?

Where exactly did all of this $700 billion go? Somebody has to be up in this game, but who?

I’m interested to hear your responses to this question, because this definitely goes above my level of understanding these credit-default swaps, etc.

For those of you who want to witness firsthand how poor your portfolio is doing at any given moment, I’ve inserted in a Forbes stock ticker.

I found the ticker from the WidgetBox site, and they have a great collection for those of you looking for some finance-bling on your blog.

Enjoy.

Brad Feld’s Advice to Entrepreneurs

“My recommendation to all of you entrepreneurs out there is to get off the negative sentiment treadmill, step up, and lead. The people working for your company are likely confused, concerned, and overwhelmed with all the noise in the system. In the near term, building your business will likely be more challenging on a number of dimensions. So what – that’s the normal cycle of business. You don’t need to be a blind optimist and spout happy talk, but you do need to have a clear sense of purpose and goals for your company. Leadership 101. When I look back at the dotcom apocalypse that was 2000 – 2002, I realize some of the best companies I’ve ever been involved in were created during that time. In the midst of this, I remember the endless stream of “the Internet is over” and “the information technology business in now a mature business and there will never be innovation again.” Yeah – whatever. Get some exercise, take a shower, eat a good breakfast, and get out there and build a great business.”

Originally from AVC.

The presentation covers what got us into this mess, and how startups can help shield themselves and hopefully make it through this intense downturn. It’s interesting to ask yourself, why didn’t Sequoia make sure their startups were briefed with this presentation before they were funded? All of the principles highlighted below are relevant in good or bad times …

How To Stay Afloat In This Economic Crisis

Some of the most important points is becoming cash-flow positive, and cash is king. All related to generating revenue.

Here are a couple of articles we’ve written on how to maximize your cash flow, during good and bad times:

How To Start Selling Advertising
How To Write-Off Startup Costs
Startup Costs Reduction Tips from the Airline Industry
Bootstrap Startup Funding: Maximize Cash Flow & Looking Good for Investors

As most advertisers know, during a recession the first line-item to get cut is the marketing budget, however, as we also know, advertising is the most important factor in helping companies pull out of a down economy.

So what do we do when our clients are telling us they aren’t advertising …because it’s a down economy? Advertising is never easy to sell, especially in a down economy, but there are sales tips and tricks you can use.

Advertising in a Down Economy

1. Perfect Opportunity to Build Market Share

So your client is telling you they don’t want to buy advertising because the market is bad and they have no funds. Considering the majority of their competitors most likely have also pulled their advertising, the economic downturn is the perfect opportunity to gain market share.

If their competitors are pulling out of advertising, this is the perfect time for your clients to put their name out their and build new clients.

2. During a Down Economy You Don’t Have to Raise Your Voice to Be Heard

When the economy is poor, there are going to be less players advertising. Any advertising your client does will have a bigger impact because there will be less noise in the marketplace. Where previously they would need the ‘premium’ option, perhaps during the down economy, they can get the same effectiveness with a ‘standard’ package.

The goal for your client is to buy something from you, if the economy is bad, don’t expect them to pull out all stops. Get them to buy something small from you this year, and next year renew for a bigger package.

3. Show You’re Strong Through Good Times and Bad

For customers looking to buy services from your clients, they want to know that their supplier is someone they can depend on and will be there through good times and bad.

Your clients should be encouraged to maintain advertising during good and bad times to show that they’re a company that can withstand any economic conditions, and thus worth doing business with.

Advertising is about consistency, and being always present. Customers may not want to buy today, but if you’re the first company that comes to mind, then you’re going to get that sale, …eventually.

4. Maintaining Share of Mind is Cheaper Than Rebuilding

Say your client doesn’t advertise during this bad economy. Their customers are going to forget about them, so if they don’t advertise this year, they’re going to have to spend even MORE money next year to remind customers they’re still around and relevant.

If they were to advertise during a down year, they could spend less money and maintain their share of mind. It’s easier to keep the customers you have than get new customers, and you should explain to your clients that this will save them money, and you can always encourage them to renew next year with a larger package as well.

Can You Sell Advertising In A Down Economy?

Are you hearing this objection a lot? Are you able to overcome it? What has been working for you when you’re told that the economy is the reason clients don’t want to buy advertising?

Is it possible to sell advertising in a down economy? Should you cut back on your goals and expectations or just look into different markets for new clients? Is it possible to sell advertising in a down economy?

Remember, keeping confidence is key. You can always sell advertising, even in a down economy. Businesses may be tempted to cut advertising when the economy is down, and it’s your job to sell that advertising and help your clients and the economy recover.

Please share your wisdom and experience in the comments below.