Back in November of 2008 Wired magazine had a short but incredibly sweet article/essay on something they dubbed the “Garage Economy.” (Back to the Garage: How Economic Turmoil Breeds Innovation written by senior writer Daniel Roth – I highly recommend taking a look at it.)
In the article, Roth brings up an incredibly simple but overlooked point – tough economic times are the perfect breeding ground for fearless genius, but most industry leaders focus on cutting back rather than taking chances and moving forward.
In periods of economic turmoil, people are hungry and work cheap, and entrenched companies often concentrate on in-house cost-cutting instead of exploring new markets, which can explode with the next turn of the business cycle.
-Daniel Roth, “Back to the Garage…” Wired issue 16.12
For those that know me, my love affair with this concept is not surprising – it echoes one of my most firm beliefs: OUT OF STRUCTURE COMES GENIUS. Meaning that the more limitations one is given, the more creative that person must be to succeed. Structure forces us to take a look at what we want to accomplish, distill it down, take stock of all our resources, and find a more effective way to reach our goals. This “structure” can be anything from the number of hours in a day, budget limitations, non-traditional resources, or in this case, an international recession.
Social media is a widespread example of this, both within the wine industry and beyond. Even as large companies cut back their advertising costs (sorry print & tv), they need brand awareness and sales more than ever. What’s the solution? Free social networks. Resources are re-directed to educate employees about social media (ideally, otherwise see this post), and instead of spending millions of dollars a year purchasing magazine ads, companies spend a fraction of that actually interacting directly with their target consumers. (One of the most incredible side effects of this is that the tiny 1200 case winery has the same chance of succeeding in this medium as the behemoth.) The question is, if all these companies weren’t being forced to cut back due to the economy, would they have made the same decisions to invest their energies in social media? Or would they have continued down the familiar path of traditional advertising?
Because of a seemingly perfect storm of economic restriction, there is a petri dish atmosphere for growing new ideas. For wineries, maybe it’s finding a way to boost direct sales when the Three-Tier System is failing them. Maybe it’s going out into the community and giving back and building a cult following. Maybe it’s forgoing glass bottles in favor of reusable metal containers/kegs for On-Site accounts. No matter what solutions companies come up with, it’s important to remember that these ideas are born out of structure and limitations. Companies that put their heads in the sand and ignore these conditions, or companies that are boarding up the windows to weather the storm, will never put themselves in the position of innovating.
Let’s admit it, the outlook is bleak when you maintain the status quo. Embrace all the limitations facing you – decrease in wine club membership, loss of a distributor, drooping sales, old-fashioned branding – gather them all up, find the smartest people you know, and GET IN THE GARAGE.