Startup surviving and thriving in a time of coronavirus!

What are my options?

For some startups, survival is about heading into hibernation and sitting out the crisis. For others, it’s a full pivot as your market isn’t going to recover. or perhaps lastly, you both face rising demand and rising uncertainty about your industry all at the same time!

Building personal resilience

Resilience gets built when you’re outside of your comfort zone — and once you learn that you can decide to just ‘not quit’ for one challenge, then you can use that personal resilience and apply it to the next challenge.

Develop the ability to do two things at once

Founders live in an uncertain world — and that experience is an asset at times of crisis.

Financial resilience- for yourself and your people

Resilience isn’t just about our mindsets and personal inner strength — it is also about the practical issue of having enough to eat and pay the bills.

Pay yourself — look after your bills

Founders will often pay themselves last — and as leaders, this is a smart move.

  • allow those people taking cuts an opportunity to earn back the missing amount through bonuses and incentives
  • replace some pay with loans (although this may have tax implications)
  • in some cases you may simply be able to delay some payments by 6 or 12 months
  • some companies (such as Revolut) have offered £2 of share options for every £1 of paycut — as a way of shifting remuneration from fixed salaries to reward based gains

Building Business Resilience

Businesses also build resilience. This is a combination of financial strength to combat crises but also the collective team strength too.

Is coronavirus a different crisis?

Coronavirus is a different sort of crisis because it will be around for a long time — so it needs a different response — and this is therefore also a time to think about how the business can do things better — and how the business can scale better too.

Are you in the right role?

Some businesses are discovering — out of necessity — that the right people were in the wrong roles. One company moved a Head of Operations to customer facing role — and it is working brilliantly!

Resilience is a team game

Resilience is easier to build when you have co-founders to share the tough times and build collective ‘toughness’ together. This might be especially important as a first time founder, so pull those co-founders close and double down on keeping the relationships healthy and strong.

Managing your revenues through the wave

It is wise to approach the current crisis as a series of on coming waves.

Do you have revenue that makes sense or do you have to pivot?

Sales to large organisations that take 4 months to pay might make life worse for your company. Instead, can you build a direct to consumer model that pays you before you deliver? If so, you have a few months to build a cash buffer as well as a new channel to market.

Everyone is a startup — begin by testing hypotheses

Once companies effectively become startups again — looking to find revenue and market fit — then everything becomes a hypothesis (see this video of how scaleups reverse back to startups).

Do you have the right investors?

It’s important to also ask whether you have the right investors on board?

How to build trust with investors

If you have investors, this is the time to increase your communication with them so that they understand that you are fully engaged in doing what is necessary to save your company.

Trust — the secret ingredient for survival

You can see it in political leadership — those that build trust gain influence — those that don’t lose their ability to influence people and events and eventually get swept away.

Become the market place or service that everyone relies on…

As we move beyond the basic trust building exercise of surviving and keeping your people, customers, suppliers and investors (if relevant) on board, then there is still a bigger ‘trust’ goal and that is to become the market place or the service that everyone relies on.

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Neil Lewis

Neil Lewis

Non-exec Founder / Scaleup Coach