Surviving and Thriving – 2020 Edition
I launched my first startup in 1998. Two years later we were facing the tech bubble followed by 9/11. My fifth startup was launched in early 2008 and was growing monthly until October of that year. The first one weathered the storm and sold, though it was a very rough sale. The fifth one we closed.
External factors were only one component of why one company sold and another closed. But external factors and market timing matter.
Realize first this is a human and societal tragedy. You need to engage with people – understanding what they are going thru and where they need your help. This includes your employees, vendors, and investors. Don’t be “tone deaf” and only focused on what your customer needs.
Markets will open, the question is when? When they do open, there will be viewer companies and even a smaller number that have figured out how to grow in spite of the circumstances. Be on that shortlist. Remember, some great companies were launched in market downturns.
Raising money is on hold for now. If you needed to raise to survive, you’re going to need to find revenue instead. Product or Services revenue are fine, it may not have been part of your original plan, but the priority is cash and surviving.
- Manage cash – this is your runway and you can’t run out of runway and survive.
- Prioritize your tribe – this will end and you’ll need to choose who stays and who goes. focus on the team that stays
- Make fast decisions and go deep. It’s better to do one deep layoff then three small layoffs. At least you can tell the team “it’s done”
- Hiring Freeze
- Find revenue – no investors are going to punish you for adding services revenue on top of your product revenue.
- Nail your unit economics – prioritize your marketing and sales efforts around your ROI
- Pivot your marketing message – the world has changed. How do you help your customers win?
- Market with the tide, if you can sell to the “stay at home market” do so
- Automate what you can
- Remote work is the new normal, become a great manager
- Reforecast – everything is new
- Fix technical debt – watching the news isn’t going to help
- Communicate, communicate, communicate
How do you know when do wind down your startup? That’s a bigger topic that I’ll cover next.
This slide deck was originally presented to Flat6 Labs Portfolio companies. March 30, 2020.