Sailing Your Startup Through Stormy Waters
During the big bubble burst of 2000/2001, many people feared our economy would never recover. I, on the other hand, saw it as an opportunity. Being a young entrepreneur is tough, especially during a financial crisis. However, these years turned out to be very rewarding and educational years for me personally.
The lessons you learn in bad times are far more valuable than those of good days and therefore, the achievements you reach are far more satisfying. I’m not sure if we are facing a doomsday scenario of a similar scale (I do hope and believe that we are not) but either way, below are eight tips to manage your startup in stormy waters and come out even stronger when the tide clears:
1. Be extra careful with expenses.
Look again at your hiring plans. Push back on hiring for any positions that are not super critical. The same goes for other expenses; anything that could be delayed should be delayed, at least for a few weeks. Hopefully, by then you will be a bit more knowledgeable about the situation.
If your current company longevity is short (six months or less), you may want to consider more drastic measures. Consult with your investors to make sure you are doing the right thing.
A final note on expenses — even in the aftermath of a crisis, investors tend to be focused on efficiency KPIs. Being more efficient will help you even if you end up taking new money earlier.
2. Focus on your clients.
Clients are always the most important aspect of your business. In tough days, even more so. When a client is happy even in tough times, that’s a great indication of a good company/product. Be in touch with your clients and ensure them you are around and thriving. These days are not easy for them either, so let them know you are there to support their needs. I’m sure you will benefit from this dedication in the future.
3. Re-examine your revenue plans.
You might see now that your revenue assumptions are a bit on the optimistic side. If most of your sales and lead generation are done face to face, and at this point your staff cannot move around, you are almost definitely going to take a hit. Even if not, your clients are in a completely different state of mind. Assume it’s going to be much more difficult to get them to commit and you’ll probably have to reduce your sales estimations.
4. Communicate more often with your investors and employees.
In tough days, everyone is more anxious. Your investors and your employees understand that the company is dealing with the situation and they should know you understand the issues and are handling them in a smart, calculated way. You cannot make their fears go away but you can make them feel better, knowing that the wheel is in good hands.
5. Put your leadership skills to work.
If you have what it takes, this is the perfect time to show it. These are the days to show leadership and vision. It’s also the time to pick up your staff and make them look at long-term goals, instead of the current unpleasant noise and uncertainty.
6. If you have active funding discussions, don’t worry about small details and try to close them now.
We have all been there; The deal is 90% done and yet the lawyers find plenty of stuff to argue about. This is the time to get involved. Just stay focused on the big picture and close the deal.
And specifically, for the coronavirus situation:
7. This is a great opportunity to build/leverage remote selling skills.
Encourage your marketing and salespeople to find better ways to sell remotely and find digital alternatives to participating in big conferences and events. This will help you now and will also be a great tool for the future.
8. Encourage your employees to work remotely.
This could be your small contribution to reducing the coronavirus global spread. Just like with the previous point, the ability of your organization to work remotely will be a great asset even once the coronavirus days are long forgotten.
Don’t forget — this is the time for opportunity. Just like you, your competition is struggling. If you are better than them, now is the time to create a real gap and to lead the space. It has been proven many times in the past that great companies emerge specifically in tough times. This is when it’s easy to show the gap between the men and the boys, and the women and the girls. If you are skeptical, just ask the founders of Airbnb, Github, Slack, and Pinterest, all of whom started their companies during the financial crisis of 2008. If indeed we are within a real crisis, then the best thing you can do is to start and run a new company!