🧟♀️ Am I Running a Zombie Business? Part One
When an email invitation leads to business soul searching
📧 B2B Mastermind — would you be interested?
March 13, 2023“We are considering putting together a mastermind of business owners who sell IP into organizations. We’re putting out feelers for now. If we were to proceed, would you be interested in joining us?”
This email message landed in mid-March like a shiny metal ball dropped into the chute of a pinball machine. It rattled around my mind, looking for purchase, for the next seven days.
Normally, I wouldn’t hesitate to say yes to collaborating closely with business friendtors in this way—it’s one of my favorite forms of connection. I hate small talk, and I love talking shop. I crave these exact types of deep conversations around the challenges and decisions in running a small business, swapping client stories and contract terms so we don’t go into our own deals blind.
“The misfortunes of others taste like honey.”
—Japanese saying via Schadenfreude by cultural historian Dr. Tiffany Watt Smith
When this email dropped, my Favorite (Former) Client had fallen radio silent for three months after asking to renew our contract for only six months, rather than one full year, as we had done for the previous seven licensing renewals. Shortly after that, the company announced a surprising round of large-scale layoffs.
One month later, and three days before the email invite landed, Silicon Valley Bank, in the backyard of where I grew up, collapsed in the fastest bank run in history.
I couldn’t shake the feeling that my tiny-to-them, everything-to-me licensing contract would be next. As longtime ‘doh readers know, I’d be in the dark for three months hence before finally getting an answer.
I glued myself completely to the Silicon Valley Bank collapse story. I listened to every podcast episode I could find, nearly one every day, that business shows were putting out. I read every article I could with the thinkerati’s hot takes.
I admit, I was driven partly by the gleeful schadenfreude of knowing that even the brightest financiers in the world couldn’t parse these economic times. It meant that maybe my own confusion and teetering business wasn’t so bad.1
And then one day, in a shock of insight, I discovered another hypothesis explaining my obsession: Silicon Valley Bank is me. My business could blow up at any moment. My clients are too concentrated in one industry. I am fragile to further market shocks.
While playing with Ryder on the hill at the park, I heard economist
mention the phrase zombie bank in a March 21 podcast conversation on “Bank Runs, Crypto Scans, and World-Transformative AI,” and it sent a new pinball rattling through my mind, blinking in bright neon letters across my brain.Had I become zombified, propping my business and household up with savings from outside, when it should have been coming from within a tighter, more functional business P&L?
As I sat on the grass, I asked my new friend ChatGPT to explain:
A zombie bank is a financial institution that is essentially insolvent but continues to operate due to government support, bailout funds, or other external factors. These banks have a large number of non-performing assets, such as bad loans and investments, that are worth less than the liabilities they owe. However, they are kept afloat to prevent further economic turmoil, financial system collapse, or to maintain confidence in the banking sector.2
What about a zombie business?
GPT took a stab: