The Upside of No Cash
“Lack of cash makes you bold.āĀ
Like many other dot coms, their day of reckoning came. They had grown to three thousand employees and the press release came out that they were laying Ā oļ¬ a third of their staļ¬. I got a call from their CFO assuring us that this was merely a ācost correctionā and that it would result in a more rational Ā cost structure. This is generally finance speak for āThe shit is hitting the fan and we canāt cut staļ¬ quick enough.ā I thanked him for the call, and candidly communicated that while I understood Ā he was calling to reassure us, we had to interpret the information that they were having financial Ā trouble. I communicated that their outstanding balance would be immediately due and until we received payment, we would suspend shipping gift cards. He said, āI donāt control the accounts payable department.ā I pushed back and said, āI donāt ship the gift cards, but I can get someone who does to stop shipping them.ā
Part of this was prudent judgment on our part. Part of it was if they defaulted, it would be a huge blow to our cash flow. Lack of cash makes you bold. Without cash you donāt have options.
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