307 Silicon Valley & 5 Crisis Marketing / Communications Principles

Silicon Valley Bank’s collapse went off like a bomb on March 10th 2023. And I want to reach out to you and essentially share with you the conversations that I’ve been having with many friends, many entrepreneurs, many VCs, in the last 24 hours or so. That said, let’s talk about what’s really going on; specifically, what the media talking heads and idiot, ‘thought leaders’ on the internet are getting very, very wrong. Second, we’ll discuss a few ideas on what you can do immediately to shore up your situation if you are a Silicon Valley Bank customer, or even if you are working in the tech world. And then thirdly, let’s talk about the crisis from the perspective of your company, and what you can do moving forward. The Silicon Valley Bank Collapse As of now, what is clear is that Silicon Valley Bank went down in part, because of some combination of getting caught in a cash crunch. It appears they made some bad long term bond decisions at low interest rates. And as you know, the US government has been raising interest rates from about 0.25% roughly a year ago, to about 4.75% now a year later. This has caught a lot of people off guard. This is not to say there wasn’t a mistake on SVB’s part, but what we do know is that there were some combination of over investing in long term bonds, and the interest rates going up that aggravated the problem. Here’s a link to the Wall Street Journal article breaking all of what has happened so far. Media and Thought Leaders’ “thoughts” on the matter First of all, there’s a thread  growing around that says, “Oh, this is the billionaires in Silicon Valley doing corrupt things, and now they’re getting their comeuppance.” This is not the case. If there was something incompetent or illegal that took place in the Silicon Valley Bank, we’ll find out once the investigations are done. But for now, it is affecting a lot of people in the space, and not just those billionaires they are harping about. This is not some cash crunch hurting billionaires. It is hurting the people who didn’t get paid on Friday, because their employer just froze their bank. This is the entrepreneur who DM me on Twitter yesterday saying they have their entire 20 million of VC funding at SVB, and asking what they can do now. These entrepreneurs and CEOs don’t know how they’re going to pay their people, don’t know how they’re going to pay their bills. It appears that the FDIC is saying that people will get their guaranteed 250,000 on Monday, but over 90% of the deposits in this bank are in excess of that. So it’s really not much protection. And while it seems that much of this money will come back to its rightful owner, it’s not clear what percentage and in what timeframe. Running a business with no money is fucking hard. And that’s what’s going on here. To learn more about the Silicon Valley Bank situation and how your business can cope with crisis of this magnitude, download and listen to this episode. Bio Christopher Lochhead is a #1 Apple podcaster and #1 Amazon bestselling co-author of books: Niche Down and Play Bigger. He has been an advisor to over 50 venture-backed startups; a former three-time Silicon Valley public company CMO and an entrepreneur. Furthermore, he has been called “one of the best minds in marketing” by The Marketing Journal, a “Human Exclamation Point” by Fast Company, a “quasar” by NBA legend Bill Walton and “off-putting to some” by The Economist. In addition, he served as a chief marketing officer of software juggernaut Mercury Interactive. Hewlett-Packard acquired the company in 2006, for $4.5 billion. He also co-founded the marketing consulting firm LOCHHEAD; the founding CMO of Internet consulting firm Scient, and served as head of marketing at the CRM software firm Vantive. We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!