The true test of an entrepreneur is during tough times when things outside of his/her control are not as rosy as before. Today, with news of Coronavirus (referred to by many as the Black Swan of 2020) and an uncertain economy, a startup founder must be thinking:
“How will this impact my business?”
“When will this get better? What should I do?”
Nothing is ever as bad as it seems
Nor does it ever last as long as we think. I had gone through a similar situation in my startup when the 9/11 happened in 2001. No one could predict how long it would take for the dark clouds to disappear. The learning for me was that startups that used common sense to survive and looked to turn every adversary into an opportunity emerged as winners. Competitors who could not think on their feet & act swiftly were wiped out.
Two examples from that era that are still etched in memory are Webex and Google.
- Webex grew tremendously after 9/11 as more people chose to teleconference.
- Google picked up dark fiber after telecom crash making it possible to do Youtube later.
I have come to know now that these traits of treading forward in affordable bets & making lemonade out of lemons is known as effectuation and are characteristics of expert founders.
Remember the basics
Effectuation is set of five basic principles, also known as first gear of decision making for a founder. It is applicable in times both good and bad. Now is the time to use effectuation more than ever. Watch Prof Saras for a quick refresher on this here.
The key thing to keep in mind is that the future is something the founder creates through his/her actions and not something waiting to be discovered.
Questions to ask therefore
What are my biases?
Who are my stakeholders? Can I connect with them more personally & online?
What if I did, would make my existing customers like me even more?
What are ASKs I can make of my customers & stakeholders?
What are the weakest links in the business? What would it take to focus resources only on that?
Does the business goal need re-iteration and clarification? Is the team aligned?
It is what cash brings, not the cash itself
At Upekkha, we share with our startup founders the Value SaaS principle of building businesses capital efficiently. When it is understood that what is needed for a business is what cash brings and not the cash itself then it is easy to understand that cash is not the bottleneck for a business.
In tough times, slack resources become available. There is lesser competition for talent, marketing resources and anything else you need. If you make the right ASK you can unlock capacity that may not have been possible before.
Conserve and nurture your assets
With current technology, and business models, most of your business can be run remotely and cost effectively. You may have assumed that a physical meeting is necessary to close a deal and therefore make visits to conferences or travel to customer offices. In today’s reality, the customer herself may have adjusted her buying process to be made remotely. Conserve your resources by questioning every assumption made on previous ways of doing things be it travel, hiring, marketing, sales, customer success/support or engineering.
The chances of finding yourself and your team a little more stressed during these times is higher as you adapt to the situation. Invest time for yourself and take care of your most valuable assets mental health, physical fitness & relationships, more than ever.
Constantly ask “how can I make Lemonade?”
When reality changes, refresh your mental model too. Find out areas where you can create new value for existing or new customers.
- Who needs things that didn’t exist before to continue to run their business, or to grow their business?
- What things are now “underutilised resources” for large enterprises, i.e., they don’t need it any longer or value it as much as before?
To illustrate with a few examples
For an offline edtech startup, now is the time to provide every school, university and tutor with an online teaching experience setup.
An events management platform startup could consider helping event organisers deliver (more) personalised experiences to the 20% of people who come to the event.
Learning Management Systems product could make a specialized pitch for remote, faceless, deskless workforce training. Help retailers to get their workforce trained when the stores aren’t full.
Tough times push you to find these creative and innovative ways of doing more with less and doing things differently to succeed. In fact, during tough times others are more willing and receptive to collaborate and find win-win outcomes.
Many of these may seem like common sense – and they are.
They are also the practices that expert entrepreneurs in challenging times use to build enduring businesses.
So buckle up, open your mind to the changed reality, and start building a new world as only entrepreneurs can.