Most readers of this blog know that our company recently sold its Jupiterimages division.  We were in the image business for nearly 6 years.  I will not bore readers with the details of the history or the highs and lows.  However there are a few salient lessons that I learned from the experience.

1.  It is good to be paranoid in business.  Always be paranoid about your competition.  Today be very paranoid about the Intenet and the force of its creative destruction.  I more than anybody should have been aware of this power, but I was slow to realize that user generated content in the image space was certain to destroy large parts of the traditional stock photo industry.  I had an inkling about what was coming in late 2003 and had a chance to purchase iStockphoto for a few hundred thousand dollars.  I was talked out of this purchase and later paid a big price for this horrible mistake. 

2.  Be careful with debt.  I have always been debt averse.  My choice has always, if possible with a public company, to sell stock to raise capital.  In late 2004 we started to buy several image companies.  Bank debt was available and we jumped into what proved to be a debt hornet's nest.  Little did I know that a combination of the growth of user generated content photos sites and a bad economy would make our debt a terrible burden. 

3.  Be wary of bankers and banks.  Bankers are friends when you have money in the bank and business is swell.  Bankers will quickly turn on you if things go south.  In our case I worked like a dog for nearly 15 months and was able to pay off $81 million of bank debt.  At the end of the process and in the worst economic times this country has witnessed in 80 years, I found dealing with the banks an ordeal.  Even as the banks were about to get their money back, they threw curve balls at us and showed an unwillingness to give in inch on any help that was requested.  I actually thought our paying off the debt was heroic, but one would never have detected this in dealing with our bankers.  Perhaps I am just too naive even though I have been running companies since 1971?  When it comes to money and debt remember that, at best, you only have fair weather friends at the bank.

4.  Be optimistic.  I am and am now armed with the lessons above.