These are the times that try the soul.
I spent much of last week in the netherworld between Chapter 11 and Chapter 7, two different sections of the bankruptcy code.
Chapter 11 represents reorganization — but for those subject to its provisions, it can feel a little like death. Your fate is out of your hands. Creditors can sell your company out from under you, but under the law you can’t negotiate your own deals.
The court and creditors may be Clueless and may be from outside your area; they may care only for themselves and nothing for what you’ve built. But they’re in charge, and you have to take it. You can go in with a plan that gets you out the other side with everyone paid off in full, but that doesn’t mean your creditors will sign off on it. They just want their money.
At a time like this, with so many content sites either distressed or gone from the collapse of Internet advertising, you may stand on the bank of Chapter 11 like Wile E. Coyote at the top of the cliff. If you don’t look down, you think, you may not fall. You know that if Chapter 11 fails to solve your problems, the next step is worse.
The next step is Chapter 7. Chapter 7 is dissolution and disgrace. It’s the stripping of your business’s assets, your employees all losing their jobs without severance, your dreams shattered, and your reputation in ruins. Chapter 7 is all seven stages of grief at once, a traffic accident. One moment you’re the man (even if you’re a woman), in charge and responsible, and the next you’re unemployed.
Once I had a Web site, made it run, made it race against time. Once I had a Web site, now it’s done — brother, can you spare a dime?
There should be other chapters in the bankruptcy code, describing steps along the way to bankruptcy. These are the chapters most people I know are going through right now. These are the chapters of layoffs, of pink-slip parties, of corporate officers acting as though they can save the ship by throwing over some human ballast.
You can see it play out in the tale of Salon. It’s trying desperately to “beat the clock” (the moment when it is truly out of money) by canceling software sales, laying off staff, begging readers for money, and hosing the rest with more and more obnoxious advertisements.
You can see it in the tale of Webvan, abandoning huge markets at a stroke. You can read about it in the Nasdaq delistings, hear it in the anguished cries of companies trying everything to avoid the dreaded “pink sheets.”
From the center of the storm, you can still hear the latest hype. The “X Internet” and automated applications will change the world. It’s all going to be wireless, wireless broadband. But if all that’s true, why then is Palm in just as much trouble as anyone else?
Someday, soon, we will reach the other shore on this story, and we’ll all have tales to tell. I hope that when that time comes, we won’t be cynical, arrogant, or hypocritical. I hope we’ll be ready to believe again, but with eyes wide open.
That which doesn’t kill you makes you stronger.
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