Business opportunities during downturns VI: The River North case in Chicago

During the crisis of 1970s (oil crises, 15 % unemployment) and 1980s (1987 Wall Street crash), River North was a run-down neigborhood in downtown Chicago.

When manufacturing abandoned the downtown area, most factory buildings remained empty and others were demolished because the value of the land exceeded that of the building.

Low life and crime flourished, and River North became known as Death Row.

During the nineties, however, artists and developers brought back the life to the neighborhood by installing restaurants and art stores, transforming old factories into "lofts" and attracting young professionals who wanted to live in downtown Chicago but could not afford Gold Coast (Lake Michigan shoreline) prices.

Today, River North is Chicago's Soho and one of the most coveted and safe neighborhoods of the city.

More than 200 art galleries and restaurants are installed in the neighborhood that continues

to build rental and condo towers as well as lofts and townhomes for a growing population of young and n ot so young professionals (I am one of them)

Food for thought?

Take a look at the testimony of developers and take a drive through the neighborhood.

How could we apply these examples to our projects?

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References

• River North Association
• River North Arte Galleries
• The birth of River North, Parte one
• The birth of River North, Part two
• The birth of River North, Part Four

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Business opportunities during downturns V: Client Service Champions 2009

I was having a light Saturday "brunch" (as Americans call a late breakfast at lunch time) at a recently opened deli in downtown Chicago when I had what Tom Peters used to call "a blinding flash of the obvious".

There I was, trying to digest the scary financial news, in a city being lashed by recession and unemployment when I noticed that Steve's Dely -a Detroit franchise- was full of people enjoying hearty meals, "comfort food" in a bright, warm space with large windows to the snow and ice-covered streets.

Steve's Deli is one of many examples of business that do good and thrive during hard economic times. I recalled my own experience with hyperinflation and recessions in Argentina: 1981, 1987, 1989 -when Argentina beat Germany's 1924 record with 4,500 % in a single day- , 1995 (after the "tequila" crisis), 1998 (called the "Caipirinha" effect), to mention a few-.

During all those years, as many businesses went under and people lost jobs, others continued and grew.

Enjoying food in hard times? "Comfort" food? Why not? What else can bring back some satisfaction when stress is all around?

Steve's Deli is full every day, lunch and dinner, and serves carry outs and delivery to the entire neighborhood.

BusinessWeek presents its "client service champs" ranking, with Amazon -34 % up in revenues, stock up in Wall Street, hiring and opening new warehouses, expanding business- and others showing that good service can (and usually does) make or break a company during hard times.

Take a look at the article and think about your PII projects. What lessons and ideas can be applied to our projects?

Food for tought can also be comfort food...

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References

• BusinessWeek (2009) Customer service in a shrinking economy
• Bernardez, M. (2009) The power of entrepreneurial ecosystems: extracting "booms" from "busts". PII Review / PIQ

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Business opportunities during economic downturns IV: BOP cell phones

BOP markets and strategies are proving resilient to the global economic downturn.

A recent article on the Wall Street Journal (WSJ) shows that cell phones sales are going up among Indian rural population by at least 11 million new suscriptions in January 2009.

Rural users find the cell phones a critical tool to negotiate and sell their products at the best price possible.

Under Indian harsh, subtropucal climate, perishable goods as food and crops are extremely vulnerable to long trips at pedestrian speed.

Before cell phones became available -in the last decade- , small farmers living on less than $ 1,000 dollars a year were at the mercy of the traders once they travelled to the closest market.


Temperature and uncertainity about the price in the next village gave grain traders the upper hand and farmers no option but to take the price or lose their crop.

C.K. Prahalad estimated in 2002 that farmers got an increase of average 45 % in the prices they could get for their products by just being able to check and bargain on their cell phone.

United Nations Millenium Goals program director, development economist Jeffrey Sachs, and other experts considered cell phones the single most influential technology in bringing people
out of extreme poverty.

Following Prahalad's advice, developed and developing -BRICM- countries might benefit from using the BOP markets as "labs" where innovative experimentation cab be tested to later transfer it to more affluent economies during times of crises.


Some of the key principles are:

1. Try innovative uses

2. Improve price-performance

3. Use simple, resilient technology

4. Package goods and services in smaller, less expensive sizes

5. Treat your client not as a consumer -the "end" of a value chain- but as a "prosumer", someone that might modify and use your products to add value, reduce costs and make a better living out of it.
The "virtuous circle" of helping clients help themselves instead of just maximizing short-term margins regardless of their future well-being is a key factor to consider both in good and hard times.

But in hard times, it becomes more evident.

How can we apply these lessons to our PII projects?

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References

• e-Choupal system
• Cell phones use in Mozambique
• Every Liberian wants a cell phone
• Iqbar Qadir: he power of cell phone to end poverty
• Jeffrey Sachs Says Financial Crisis Presents Opportunity for Asia -- Part 1
• The end of poverty: the "homework" of our generation
• Bellman, E. (2009) Rural India snaps up mobile phones. Wall Street Journal

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Business opportunities during economic dowturns III: e-Travel and Intellectual Property

Intellectual property reacts counter-cyclically to economic downturns.

Firms are looking for those patents or brands they own but not use to sell them in a market where other firms are trying to find "niches" without investing in developing new technology or brands.

Intellectual Property banks such as Ocean Tomo specialized in IP evaluation, appraisal and transactions, see a growing interest in Intellectual Property and other intellectual capital assets.

Other business model that is growing during downturns is the so-called "e-Travel" Web sites, which offer ticket reservations combined in touristic packages.

Cost-savvy and more sophisticated tourists use increasingly these Web sites, looking for locations, experiences and cost savings.

The chart shows this industry projected growth for 2009-2012, both in travel sites such as Expedia and Orbitz, travel and ad networking, airlines web sites and other parts of the online e-Travel ecosystem.


Web sites such as i-Explore introduce travelers to the "path less travelled", less common intineraries, thus stimulating the development of new touristic destinations.

Web sites such as HGTV and Fine Living. com show both touristic attractions and real estate property for sale or rent, further opening new markets.

How could we use these trends to benefit our PII projects?
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References:

• Johnsson, J. (2009) Niche firms gain ground against online travel giants. Chicago Tribune
• Meyer, A. (2009) Intellectual Property sales grow in down market
• HGTV goes to Loreto Bay, Baja California to promote sales of real estate to US consumers
• Fine Living.com promotes Sea of Cortez
• Searching for "Sonora" in iExplore
• Searching for "San Carlos" in iExplore

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