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January 2002
Welcome to the Brigham Scully Newsletter.
Good Riddance to 2001
For those that wonder if the advertising/PR world mirrors, or indeed is a harbinger, of the business world in general, the past year should be proof positive.

Although 2000 was our best year ever, it started slowing down in October. From that point on, three major events influenced our clients and our 2001 business - the pendulum of capital availability swung far to the "tight" side, acquisitions/new management appointments were mishandled and, of course, 9-11 provided an excuse for most to do nothing but wait things out. In all, our business dropped 15% overall, which is not bad considering that 2000 was very good and most of our competitors lost half their income during the past 12 months.

It's been reported and documented by people smarter than we how the capital market reacted earlier in the year. We lost two clients as a result…one probably should have died, but not for that reason and the other went into bootstrap mode and just signed up again this week. The former had a phenomenal technology that was selling and we were getting them piles of press clippings. Nonetheless, their angel investors insisted that one of their own, a former Microsoft VP, take the COO helm…disaster. (To wit, we began asking the question, "Name one Microsoft executive that's been successful after leaving Microsoft." There's got to be one.) Under his leadership, business and capital more than dried up, justifiably so.

We saw two acquisitions/management realignments this year. From our perspective, here's how they typically play out. We'll use the acquisition as our example…new management put in by the investing groups works similarly. The acquired company has been very successful serving its niche of customers. We're getting them tons of coverage. In fact, their market share has been growing. Sales are up and they're making money. To "fill out the portfolio" of another company, they are acquired as a "strategic investment in our future growth." Of course, now that they're acquired, they must shed their prior corporate personality and take on that of the acquirer. That costs about half the sales force because now the salespeople make less and report to someone who has never been in their industry but s/he needs it done a "new" way. Corporate marketing lends the acquired organization Ginny, the 24-year-old English major (so she knows writing!) to assure all marketing reflects Corporate. This "look," of course, was established by a freelance artist in Idaho and has nothing to do with messaging. Well, you got the idea. Within six months or so, sales are a dribble of what they were and the acquired company is completely absorbed, losing all identity and people and budgets are cut. The difference with new management is that they are determined to concentrate on new markets (those with whom they're familiar) at the detriment of proven successful markets.

When any major event happens — and 9-11 goes beyond being a major event — businesspeople don't like to make decisions. But here is what was driving us crazy-half of our clients are in the security industry and only one stepped up to the plate! What drove us even crazier? Half the prospects we were talking to were in biometrics, the hottest technology for Homeland Security. Are any of them doing anything different? Nope.

Smart Companies

We think Kalatel-security surveillance systems in Corvallis, Oregon, nMetric-factory scheduling/visibility software in Irvine, Zebra (Eltron)-plastic card printers in Camarillo and RemoteVideo-web-based remote video monitoring systems in Irvine are very smart companies. They all hired us in the last three months. We recommenced work for RemoteVideo this month.

If our business is a harbinger, we've signed three accounts in three months and, one of them, is a rebound from early 2001! Follow-up-next year at this time.

We hope you have found this newsletter to be informative.  If there are others you know that would like to receive this email, please feel free to forward us that information or call us at (818) 716-9021!
Copyright (c) 2002 Brigham Scully