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Navigating NetCore – The Past Year (Part 2)

August 25th, 2009 · 5 Comments

It was then that we made a decision to focus on bringing the business to cash profitability in a year or so. This meant that we would have to bring down expenses and work harder to grow the existing revenue streams faster. It would also mean eschewing newer ideas to bring a stronger focus on the things that were working. This was especially hard for me because I always like to experiment and try out new ideas. But the need of the hour then was different.To reduce expenses, we first focused on the two biggest cost heads – staff and SMS costs. We asked a few people to leave (less than 5%). We worked hard to manage our SMS costs better. And on all the other costs, we introduced tighter controls. At a company meeting, we explained our decisions to all the staff.

We also postponed a few projects to put more resources on those projects that would pay off quicker. It was a sudden change of gear, but we managed it quite well. In April this year, continuing in the same vein, we reduced salaries of top management, put the sales team on a higher variable pay, and froze salaries of everyone else for six months. All of these cost management exercises helped us fix our expenses at a figure which was 15% lower than what it was a year ago.

Continued tomorrow.

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5 responses so far ↓

  • 1 Max // Aug 25, 2009 at 5:06 pm


    You are well famous for your new ventures and unique ideology.

    Sometimes environment compels one to take certain good or bad decisions. May be Burn rate has made perceived effect more on you than the real effect. And it seems you deed the same, what a normal managers would have suggested you to do.

    As a common man when we fear about the mounting domestic expenses, we think about savings as per our elders’ experiences and guidance. But in today’s economy savings does not help longer as expenses are doubling every third year. So only alternate could be earning more. And same would be true in business as well. Creating another channel for revenue, could be the best alternate parallel to savings.

    I trust, Your uniqueness of thinking pattern and personal man management can certainly find a better way to combat the recession.

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