Everything in Moderation

Too much red meat, eggs, bread and pasta in your diet, and you'll end up with dangerously high, bad cholesterol.

All work and no play will make you a dull fellow.

All play and no work will make you a poor boy.

All of these lessons we contend with in our daily lives. They should have taught us that moderation is the basis of endurance. Yet the business world was caught off guard when, after living in the extreme lane, the tech sector suddenly imploded. We shouldn't have been surprised.

Too many new companies were built on well wishes and ideas and not even a shred of a business plan. Even well-established companies that should have known better jumped into the fray with ill-conceived mergers, acquisitions and spending sprees.

Those companies were even heard saying bigger is better. More is better.

However, as the walls began to crumble and the foundations began showing signs of stress, they fortuitously began pulling back and reverting to what made them work in the first place: tried-and-true business practices. Only now can we see the error of our ways.

It once seemed acceptable for a company to buy another company just because everyone else was doing it. If a competitor bought a company and began experiencing sales success with some smoke-and-mirrors technology, others quickly followed suit — a poor gamble if that “success” stemmed from a seemingly promising conversation over dinner and drinks.

When was it ever smart business to jump into a new technology or strategic partnership without plenty of scrutiny and due diligence? A decision made in haste leads to waste.

Finally, at midyear, the tech sector and the wireless industry have begun witnessing some hope mixed in with the horrific plunders. There are signs, albeit tiny, that perhaps the unwise moves of excessiveness won't culminate in our own demise.

A handful of companies are beginning to show a weak pulse despite the uncomfortable interlude when the flatline seemed a permanent state. Smart companies are back to shopping for bargains. If they need equipment, they negotiate the deals based on what they actually need, not based on dream lists. Companies are deferring their big-ticket purchases until the economy steadies. And finally, companies are looking at purchases that will help them streamline their current processes — making them stronger and more efficient at the core and extending out from there.

Wireless carriers are leading the back-to-basics crusade by reverting to simple blocking and tackling.

NTT DoCoMo's strike to become the first carrier in the world to launch 3G was watched with awe, anticipation and a fair amount of fanfare. However, even the mighty have shown they aren't immune to business realities. The Japanese leader revealed that it's OK to admit business economics should win out over time to market. And while other carriers continue to push hard for 3G in a timely fashion, they, too, are showing restraint.

Yes, wireless data is opening doors for hundreds of thousands of applications to ease consumers' lives and increase their productivity; however, now carriers are re-evaluating the premise that all-IP means you can just slap a bunch of apps up there and go for broke. Carriers acknowledge that this headstrong strategy will backfire. Therefore, they are seeking out the applications that make the most sense to the largest portion of their subscriber bases and are planning to test-market their suppositions for confirmation. Then they will launch a gradual and sensible progression of services.

At industry gatherings, the agendas are refocusing on the nuts and bolts of network build-out and standards, rather than the soft-news, golly-gee sessions dedicated to bragging about what a wonderfully profitable mountain the industry is sitting upon.

The message in the end? No matter how fabulous the economy, no matter how glitzy the deal, no matter how prestigious the partnerships, it still comes back to the basics: Practice moderation and good business. It's OK to be the company that does one thing quite well if there's a strong market for it. There's no real driving reason to diversify and try to mimic mega-companies simply to have the size to drive economies of scale.

The ultimate pledge of the business moderate just now is revealing itself. If you make a mistake and can recover, it's called experience. If you make the same mistake more than once, it's called stupidity.

With luck, this past year will be remembered as one of experience.