Given I have the privilege of working with and advising a lot of companies I thought I’d take this opportunity to jot down some thoughts that might help you navigate these uncertain times.
I’ve been in tech over 20 years - my software career started with Y2K, the first startup company I was involved in struggled through the dotcom crash and the software company I co-founded started in the twelve months before the GFC – suffice to say I’ve been through a few crisis points.
So here’s some reflections - hope they help.
PEOPLE At these times the most important things are not things but people.
At this time your team will be looking for leadership and certainty. Now of course that is difficult when no one knows what is actually coming next – but be intentional about your role and your communication – even if to say you need to give daily updates as the circumstances around you change. Be wise, be realistic, be decisive, but be compassionate.
If there is stress on your cashflow you can look at what a team approach to reducing people costs might mean. At my software company, when we had cash challenges we asked all the staff to consider a 10% reduction in salary for a fixed period of 3 months so that we supported the business together – all but one person signed up to this. It then turned out that everyone was able to keep their job rather than having to let a few go.
If you do have to let some staff go, do it respectfully. Offer to support as much as is feasible based on the situation you are in.
CASH In these times if people are most important, cash has to be the next most important. My experience is that startups are generally optimistic and as perennial problem solvers just think this is another problem to solve. Whilst that is partly true – you need to survive through the crisis to be there on the other side and it is more likely you won’t make financial changes fast enough. Deals you thought were done may not happen and depending on your sector, customers will change their spending.
If your business is not one that can accelerate during this time then you need to cut expenses faster than your revenue is going down to build the longest runway you can. I’d suggest running a number of scenarios that look at receiving 10% (worst case) and 50% of your current revenue and consider what levers you can pull to maintain cash.
Right now the government is offering economic stimulus options, so make sure you are getting advice on what is available here – I’m sure I don’t have to tell you that one.
If your business can accelerate during this time then there is still venture funding around (and we can chat) but otherwise funding will be difficult to come by and even if you can find it, you may find your valuation has just been reduced and you won’t be negotiating from a position of growth and strength.
OPPORTUNITY In any crisis there is always opportunity. For some companies the crisis itself may actually improve business, but for most this requires some more intentional planning. Remember that some of the best tech companies around like Slack, Waze, Airbnb, Stripe and Kickstarter were founded during the GFC.
Maybe this is a time to look at a pivot – can your solution be repurposed at this time. Maybe it could be a chance to build your pipeline by adding value to your potential customers that supports them now.
PERSONAL HEALTH I think we all have a set of energy tanks that are interconnected – physical, mental, emotional and spiritual. If one of these are low then the others are affected and it impacts how the whole engine functions.
During these times of stress it’s important to understand what fills those tanks and what drains them – which may look different in isolation. You’re going to need to stay healthy to get through this. At a minimum stay eating healthy and probably think about getting out for a run or brisk walk, which is one of the few outdoor activities you can do right now.
HOW CAN YOU HELP In the midst of your business challenges – let’s remember we are in this together. Character is often defined or revealed in the places of adversity. So as you battle through your own challenges, how can you and I offer a helping hand to our fellow humans.
What I do know from the crisis times I’ve been through – is that they have a start and they have an end. Our society had maybe lost its way a bit on remembering what is most important – so hopefully out of the crisis that can reset and know that it will end.
HOW CAN I HELP? I’m not sure how much capacity I have for this – but if you need a chat, if you need to get some outside input into a critical decision you need to make, or if by having a place to download it will help - then email me and I’ll try and do what I can.