How ‘Business Athletes’ Can Win in Uncertain Markets

Winning in business requires many of the same qualities that enable athletes to achieve greatness. That is why I often encourage my team to them to think of themselves as business athletes, an idea that some career coaches have spoken about. For founders and entrepreneurs, this mindset is a competitive advantage in any economic environment, but especially now, in a time of uncertainty.

From the trajectory of inflation, to rising costs, fragmented supply chains, and the stress of managing everyday life, there are many different views on what the next six to 12 months will bring. The puzzle for those who are in the process of starting a new business is how to find opportunities in this cycle rather than falling victim to it. It is not a time to panic. It is a moment to strategize and execute.

I know firsthand how vexing and intimidating that puzzle can be. I launched OpenGate Capital in 2005 and immediately faced the fallout of the 2008 Global Financial Crisis. The lessons I learned in the process are some of the most important I have learned in my career. These lessons have informed my idea of what it means to be a business athlete, and I believe they apply not only to the world of private equity, but to all new ventures.??

Here are three that I come back to time and time again:

1: Adversity breeds opportunity.

Adversity historically inspires scrappiness and innovation, and economic uncertainty or even volatility can provide fertile ground for creative thinking. Often, it gives entrepreneurs the freedom to bend the status quo and gain a foothold where they might have struggled to break in before. This was the case with OpenGate in 2008, when there was a cycle that allowed investors like us to enter the market and acquire businesses across large parts of the economy.

In our business today, we are seeing exciting trends in sectors that could benefit from increased onshoring, as a recent study pointed out that 62% of manufacturers have started reshoring or near-shoring their production capacities. We also see a lot of opportunities for stable and recurring-revenue business models in sectors including A&D, critical infrastructure services, industrial tech, specialty materials and advanced manufacturing.

The use of robotics, 3D printing, and advanced automation has allowed Western companies to onshore production at a reasonable cost, shifting away from lower-cost labor in Asia, in favor of “owning their local supply chain” using low-cost automation. This is why, back in 2018, we developed OGx, a proprietary platform for bringing cutting-edge technologies to our portfolio companies in the lower-to-mid-market.

2: Preparation is everything.

As an entrepreneur in any economic climate, you will have to maintain an acceptance that there will be obstacles you simply could not have anticipated. Market volatility, however, doesn’t need to be one of them. A time-tested body of research shows that while many businesses have struggled to survive in past downturns, a notable portion also thrived. Preparation and contingency plans were the make-or-break variables between the firms that were able to quickly react and adapt and those that were sluggish to respond and limped through drawn-out and painful strategy shifts. Having the discipline to think ahead and the agility to absorb different perspectives could provide the greatest opportunity of all, and as has been said, “the amount of good luck coming your way depends on your willingness to act.”

3: The best plans stall without the right team.

These will be high-stress times with little certainty for when things might ease off, so you’ll want to build a world-class team who are culturally aligned to the mission and have the right pattern recognition to create alpha. This way you’ll be ensured that you’re backed by a team both committed to the cause and with the ability to also handle what might be unchartered territory for all.?

Additionally, your people will need the trusted and respected space to bring creative ideas and take calculated risks, feel reassured they have a clear growth trajectory in their careers, and belong to a positive and inclusive working culture. At OpenGate, 2022 was an important year for us on all of these points. For example, we were proud to recently announce nine promotions and appoint a new Head of Talent and Culture—and as I recounted in my last article around Thanksgiving—one of my greatest pride points is how we’ve become a firm that comprised 16 nationalities and 12 languages.

Looking forward, I do believe that we are in a perfect storm, one that will present challenges and opportunities for many. First and foremost, we must recognize the changing environment and shift our mindset to respond with intention rather than negativity or regret. Tough times don’t last forever, and good times never last long enough. As I often say, if you have the right team and the right playbook for this environment, you have the right to win. Full stop.

Stay optimistic, be resilient, and stay close to your people. There is every reason to feel confident about the future. Stay the course. ??