The outbreak of the Coronavirus has not exactly been good news for startup companies across the world. These are difficult times and the upcoming weeks and months will tell us more about which businesses will make it. Many startups find themselves in the midst of a defining moment and what they choose to do, or not do will have a huge impact on their future.
Within the Epicenter community, there are several serial entrepreneurs, change makers and thought leaders. They both have insights, knowledge and ideas if what businesses can do to survive the Coronavirus. In this blogpost, we get the perspective from an entrepreneur and a VC expert. For any startup reading this – we hope this can serve as a guideline to assist you in making the best possible decisions.
Companies during such pressing times need strong & open leadership more than ever before. While I have some experience of being part of a startup when the 2009 financial crisis happened, the incident with Covid 19 is truly a black swan where the general population is in panic mode. After speaking to different founders that we work with, here are 3S principles that I recommend to founders of scaleups that are having it hard right now.
• Survive: To survive, you need to understand your actual runway. It is safe to assume that new sales will dry up or take much more time than you think. Most governments have introduced some sort of welfare package for small companies to save taxes to be paid on employee costs to ease the burden. But don’t be too emotional to reduce your overhead costs.
• Strengthen: This is a great time to revisit your whole business model architecture to understand how can you create building blocks to become stronger. For instance, one of the companies we work with are innovating on their sales by moving their whole stack to webinars & online marketing.
• Scale: As quoted in the famous Indian scriptures “This too shall pass”. Maybe this situation would last for 12-18 months or maybe it gets better post-summer. Irrespective you will survive to find ways to scale your business. Maybe it won’t be exactly as you anticipated but hang in there.
We are planning on a founders hotline with partners & VCs that would be able to offer clarity, help, networks and anything they can to help. If you would be interested, you can send more info here.
In times like these startups should, like all accountable companies, take good care of their personnel; let people work from home and avoid unnecessary in-person meetings. The business is very likely to be affected by changes in the underlying market as we expect every startup’s customer in any business segment to be impacted. A startup’s ability to adjust and respond to those changes will be a necessity. At Telia Ventures, we will work with our portfolio companies to help them to go through these challenging times and leave stronger.
In conclusion: First you need to understand your runway. Then take this time to revisit your whole business model. Most governments have introduced some sort of welfare package make sure to check these out. Also remember be patient and to take advantage of the flexibility of being a startup.
Stay connected and tune in for more articles on the subject in the Epicenter blog.