The economic consequences of the international Covid-19 “Lockdowns” have been catastrophic. The effect of highly interconnected and inter-dependent globalized businesses simultaneously shutting down has produced a Global Ripple Effect. Multiple ripples are expanding outwards from various centers – their effects magnified as they collide with each other across countries and industries worldwide.
In the US, the loss of jobs from bankruptcies and closures saw unemployment soar by 10 million in just three weeks – former Fed Chair Janet Yellan predicting that unemployment might reach 21% in the US. In the UK, Oxford University projects job losses of 30%, and up to 50% of workers struggling to pay their bills.
Predictions for GDP loss in developed countries vary from a staggering 15% to an incomprehensible 40%, while for developing countries, the UN’s WTO, WHO and FAO have warned that food shortages could arise due to collapsing Global Supply Chains.
It‘s not just household names and established businesses that are falling like dominoes. “New Economy” favorites such as AirB&B and Uber are scrambling to raise capital or shore up capital reserves as revenues disappear. Similarly, major Investors like Softbank predict that up to 15 of the project companies in its Vision Fund may go bankrupt.
Everywhere one looks, it is just wholesale devastation, with the only potentially profitable sectors for the next few quarters seeming to be the liquidations and bankruptcy divisions of major legal and accounting firms.
Given this Global Meltdown, it is surprising that there are any positive stories coming out. One that is drawing attention is Global Telco Webtel.mobi – a Guernsey-based Mobile Telco and Mobile Payments Platform with worldwide operations.
Formed in the aftermath of the 2008 Economic Crisis, it is not just weathering the current storm, it seems to be completely unaffected by it. The company is moving ahead at pace with its worldwide expansion – without any change to its plans or momentum.
This market-bucking situation is reportedly the result of the company’s experienced management team having studied the lessons of the 2008 Global Financial Crisis. From this, they built their business structure and model to be resistant to any future financial crisis – developing a “Crisis-Resistant Business” or “CRB” model.
A summary of the 12 “CRB Principles” that it applied to ring fence the business model, as recently shared with analysts, can be summarised as follows
1. Remove – and avoid – all Debt
Keep the company debt-free. Achieved by management and selected private investors providing all excess funding requirements. The company is therefore free of interest payments and/or debt-repayment calls in the event of a crisis.
2. Remove Liquidity Risk and Currency Risk
Remove liquidity risk and currency risk, to remove vulnerability due to debtor default or currency collapses. Achieved by having a model that is Pre-Paid only, and by having over 40 Platform Currencies – with all client credits and debits only in the currency they load.
3. Remove Marketing Costs
Remove brand and retail marketing costs. Achieved by expansion via own-name Affiliates, which market the service under their brand, and send retail marketing to their existing client bases via their own client communication channels.
4. Remove Premises and Personnel Costs
Remove all premises and personnel not critical for function. Achieved by dispensing with all premises other than one office, implementing a remote-office structure on a global basis and building an AI management system to carry out administrative management functions.
5. Remove Excess Operational Costs
Remove all non-critical and non-core operations. Achieved by outsourcing non-core and non-essential operations to contracted entities, with costs incurred only on actual usage.
6. Remove all External Dependencies
Remove all reliance or dependence on any external party for any business or operational function. Achieved by building or creating all required functions in-house. Consequently, all activities are company-controlled, and even outsourced activities can be immediately switched to other providers or brought back in-house.
7. Structure a “Costs-to-Revenues Equilibrium” Model
Structure all processes so that costs are only incurred simultaneously with revenue generation. Achieved by applying a pre-paid model, removing all excess operational costs, and incurring costs only on service use that simultaneously results in revenues.
8. Structure a “Best of Both” Traditional + New Economy Infrastructure
Retain the best of Traditional Economy Structures and combine them with best New Economy Structures. Achieved by Traditional Economy management, processes and infrastructure combined with New Economy internet and mobile internet accessibility and processes.
9. Structure “Client in Control” and “Hardware-Light” Systems
Place the client in control of his/her accounts and minimize hardware requirements to remove the retail personnel and premises requirement and to empower clients. Achieved by restructuring the telecoms network to be internet-initiated and compatible with all networks, all Smart and Pre-Smart Phones (https://webtel.mobi) and all PC/Mac devices (https://webtel.mobi/pc). This removes requirement for retail premises and staff, and enables accessibility to and by the entire global market at zero cost
10. Structure “Essential Services” Products for Widest Market at Lowest Cost
Provide, at the lowest cost, services that are essential to a broad market, even during an economic crisis. Achieved by providing mobile telephony, mobile payments and related essential services, to 190+ countries, across all market sectors. Removal of most operating and marketing costs allows service to be provided at costs that cannot be competed against.
11. Structure a “Globally Accessible” Platform
Structure a platform that is easily accessible from and in all markets regardless of IT-literacy and technical / financial constraints. Achieved by building a simply presented, easily used, bandwith-light Platform, easily accessed and used regardless of low or high internet IT literacy, using minimum bandwidth. Therefore also accessible to the 70% of people worldwide on bandwidth-expensive Prepaid Mobile contracts, the 60% of pre-Smart Mobile Phones worldwide that cannot access modern apps, and slow and/or expensive internet markets.
12. Structure “Efficient Administration by ‘Narrow AI’”
Use “Narrow Artificial Intelligence” to reduce personnel requirements and increase efficiency and reliability. Achieved by building a Narrow AI system that manages and administers Platform, Facility and Operational processes worldwide 24/7/365; removing the requirement for administrative personnel.
Webtel.mobi’s Global Operations – due diligenced by global consultancy Frost & Sullivan and several law firms – has graphically demonstrated the successful implementation of these CRB principles, and their effectiveness.
While companies around the world are falling or seeking bailouts, Webtel.mobi expansion is progressing exponentially, with entities in over 193 countries having become Affiliates, bringing with them over 400 million existing clients.
It’s hard to fault any business model that provides a self-reliant global business operation with virtually no premises, no personnel and no costs that aren’t directly related to simultaneous revenue-generation. Moreover, when it’s one that simultaneously remains immune to the effects of seismic market shocks, these characteristics become even more noteworthy.
Perhaps, in the aftermath of whatever the impending Global Recession brings, the market will see more companies structuring CRB models like this one, as they plan future defense strategies against the unexpected – or expected but unscheduled – boom and bust of the global economic system.