One of my great frustrations in running online publishing businesses is with the nation’s devotion to what I call the “Logan’s Run” economy.
For those of you who aren’t connoisseurs of 1970s science fiction movies, “Logan’s Run” was a 1976 dystopian portrait of a future America where all people are put to death on their 30th birthday. (The title references the film’s hero, Logan, who says ‘to heck with this’ and, well, makes a run for freedom.)
In the world of “Logan’s Run,” as soon as you stop growing, it’s time for you to die.
That’s the attitude that’s infected too much of entrepreneurship and business management in American and other Western economies. Investors are looking for businesses that are poised to enter a sharp growth phase, so that they get in now and later can bank a strong return on their investment. There’s no inherent harm there. Venture capitalists long have been with us, and can perform a valuable function as the catalysts which allow great ideas to grow quickly.
The trouble is when this Big Bang model becomes the only model that business managers are interested in pursuing. When that happens, businesses that no longer can (or never could) show the steep growth that professional investors demand are left to die, or like the 30-year-olds in “Logan’s Run,” are killed even when they could offer many more valuable years of life.
No manager wants that for her or his business. So they do whatever they can to make their businesses look like perpetual adolescents, always growing, growing, growing. When that growth can’t be found naturally, through productive new businesses, managers often fake a blackening bottom line. They lay off employees, cut benefits, play tricks with accounting and, ironically, cut or abandon the research and development that they need to create real growth for their businesses.
But what’s wrong with a business that doesn’t grow? What’s wrong with a business that simply maintains its market share, maintains its revenue, and provides living wages for its employees and a consistent flow of income for its owners? Why does a business have to keep providing an ever-increasing level of profit beyond that?
It only does because the West’s financial industry has decided to demand it – not just venture capitalists and angel investors, but also the investment analysts and stock traders who no longer care about “buy and hold” strategies, thanks to the lowest federal tax rates in 60 years encouraging a “get rich quick and cash out now” philosophy toward investment.
To heck with that. I wasted too many years watching co-workers get laid off from the highly-profitable newspapers where we worked, just because the paper’s corporate parents were trying to keep up with the annual profit growth rates other businesses were posting during the tech and housing bubbles. Why should good, productive workers, who are creating value for readers and advertisers, lose their jobs just because they aren’t creating enough additional value for those customers every subsequent year?
Just because you stop growing doesn’t mean that you ought to die. Sometimes, that means you’ve grown up and reached a level of stable maturity that can enrich everyone around you for years to come.
Journalism publishing used to be one of those mature industries, with locally owned publications and stations serving their communities, providing good incomes to employees and owners. To play Wall Street’s game, we created an illusion of growth by handful of newspaper companies buying more and more other papers around the country, helping make those buying companies look like they were “growing.” But all they were doing was consolidating an industry that needed strong local connections, more than anything else, in order to survive. And look where that’s gotten us.
I’ve had it with trying to appease Wall Street. That’s why I don’t work for corporations any longer, and can’t imagine myself going back. That’s also why I’m going out of my way now to look for family-owned businesses with which to spend my money, instead of giving it to growth-addicted corporations. Give me a mom-and-pop restaurant when I’m on the road. I haven’t eaten at a McDonald’s in more than 10 years.
It’s time for those of us who are sick of being the Street’s victims to declare our own “Logan’s Run” from Wall Street’s death sentences. Here’s to all the privately-held publishers – and other businesses – out there. Keep fighting the good fight. We don’t need Wall Street’s money – and demands – to build great businesses for ourselves, our customers and our communities.