Dear fellow startup founder,
The worst part of the Covid-19 crisis isn’t just that previously-profitable businesses have touched zero revenues - it is that there is no visibility on a timeline for a return to normalcy or even an end in sight. This isn’t the first time we have seen an economic crisis. Historically, there was the Great Depression of the 1930s, and more recently, the 2000 dot-com bubble followed by the 2008 global financial crisis. However, the Covid-19 pandemic threatens to eclipse the rest in terms of the sheer amount of time companies around the world will require to make a successful return to their respective pre-Covid growth & revenue numbers.
The impact of Covid-19 has been felt on a majority of startups, with several employees losing their jobs & startups with earlier high revenues seeing zero revenues for several months now. This means that now is the time to revisit not only business and consumer mindsets but also core business models.
Here are a few things you can do to ensure that you & your startup survive (and hopefully thrive as well) during these times of crisis:
- Being everywhere means that you will be nowhere, so it is time to be decisive
While it is our job as startup founders to be paranoid and visualize worst-case scenarios, it is also our job to be calm and thoughtful. Knee-jerk reactions are characteristic of a crisis. We need to think of this crisis as an opportunity and be decisive. Trying to address multiple problem areas/issues at once will only dilute our efforts. It is time to conserve and focus our strengths on key areas.
- Identify factors that are in your control
External factors like when the lockdown in different parts of the country isn’t in our control. What is in our control are expenses, communication with employees, and customers, identifying new opportunities and so on. We must capitalize on & make the most out of the things that we can control.
- Go deeper into fine-tuning your product-market fit
The crisis is going to have implications for the next 18-24 months at least. Now with the lockdown slowly opening up, there are going to be cycles of ups and downs in the market, with intertwined negative and positive signals. Founders have to go three-layers-deep within their usage and customer data to really figure out their respective PMF and really isolate the signal from all the noise.
- Be conservative, but not pessimistic
There are entrepreneurs who are worried about the crisis, entrepreneurs who are not worried and entrepreneurs who are ignoring the crisis. We need to have a healthy balance of optimism and conservatism. We have to be as lean as possible with expenses. Investors can advise capitalizing on the crisis and expansion but always remember - once the money leaves the bank account, there is no bringing it back.
- Update your action plan and account for worst-case scenarios
As an entrepreneur, one of the toughest tasks is to make an Annual Operating Plan with clearly-identified key targeted metrics. However, if we don’t have an updated plan in place, we will have no visibility on whether we are moving in a positive or negative direction overall at any given moment. In a crisis like this, it is also important to plan for various worst-case scenarios which have been unprecedented.
- Believe in yourself and don’t play to the gallery in times of crisis
Lastly, now is the time to remind yourself of why you started this business you were so passionate about in the first place. Speak to yourself, your leadership team as well as your employees and customers on why you started on this journey. It is extremely important to take care of yourself and your mental health in these tumultuous times.
Stay safe. Stay strong. We’ll make it through this. 🙂