Commandments for Startups - In these Difficult Times
Our Prime Minister Narendra Modi said, this is like a world war, we need to plan not panic. Hope is not a strategy; wait & watch is not going to work and not acting is not a choice anymore. We need to be decisive – time is of huge essence – as we do not have instruction manual for such a situation.
How to prepare Employees for & after Pandemic?
In such crucial times, we need to bend over backward to support our employees & customers and show empathy. If done right, remote working can boost productivity and morale, but if done otherwise, it can breed inefficiency and demotivate employees. We need to use new tools like tandem, slack, zoom, doc sharing, VPN, bandwidth and others for distributed workforce, and create smaller, cross-functional teams with clear short-term goals.
Communication will be another key aspect driving organizations during these turbulent times as lack of communication will lead employees to assume the worst. Hence companies need to have virtual meetings just like face-to-face meetings. On the other hand, the teams that know how to stay focused on executing on the product and customer priorities will win in the long run when the markets turn around.
The Changing Role of CEOs
These are testing times for every leaders, especially the ones who have just dived into this whirlpool. Their priorities are shuffled and it is important to ensure they don’t run out of cash but rather increase their runway and shift the focus from ‘playing to win’ to ‘playing not to lose’. Hence renegotiate every contract as there is no fixed costs policy anymore. The newly appointed CEOs needs to put in place lifeboat plans for one and two-year downturns, while also evaluate impact on his/her business, finance, fundraising, sales, marketing, headcount, and capital spending to come up with new business plans and strategies. Just like successful leaders, they need to lead from the front and be transparent with investors, customers, employees while sharing the new strategy and plan.
When fishermen cannot go to sea they repair their nets so its time executives and leaders sharpen their skills through online courses. So reimagine your business and make it happen
Leveraging the Pandemic
Time is money and successful leaders know how to even leverage the downturns. Hence I advise them to use the slowdown for innovation in technology, processes, and business-models. The best way to innovate is to think of an ideal solution to a problem and then think out-of-the-box and new way to reach as close to this ideal solution as possible. So re-architect your product if needed and improve user experience.
On one hand, companies especially startups are facing major cash crunch and on the other hand, there is a significant slowdown in angel and VC funding. Even data from crash in 2008 showed that seed rounds recovered early, but later stage funding took years to recover. Hence only exceptional companies will be able to get funded with valuations dropping, so plan your fund raise appropriately. For startups, path to profitability and cash burn rate will be the top priority. So be a leader and inspire your teams in this difficult environment. Remember, no winter lasts forever!
Hence focus should be on industries that will grow, like edtech, healthtech, fintech, any online business, collaboration, security, online entertainment and others. We should also focus on product with strong value proposition and seek new opportunities in this environment in geographies which use less resources and give quicker revenues. Even your competitive landscape will see a huge change; some of the smaller competitors may die while bigger may come out stronger.
Just as Nabil Sabio said, ‘When fishermen cannot go to sea, they repair their nets’, so its time executives and leaders sharpen their skills through online courses. So reimagine your business and make it happen.