As COVID-19 swept over the startup landscape, early-stage investor Fatima Husain spent hours on calls with first-time founders, veteran entrepreneurs, and large tech company executives. The result is a practical guide for founders stabilizing companies and preparing for the next two years.
Listed below are the three main areas that have been top of mind for leaders as they adapt to the new normal, operate with integrity, and find opportunities to succeed: Over Index on Trust. Prepare for the Worst. Focus on What you Can Control.
Trust is foundational and communication is key
Successful companies are built on trust. Over-communicate and share information proactively with stakeholders: your team, users, and investors. Create an environment that promotes the sharing of ideas and makes people feel safe and welcomed to speak up.
“The best advice I received is that hearing ‘I don’t know’ can be more comforting than hearing educated guesses at this time. Internally, we are over-indexing on radical candor in team-wide discussions, doing 360s of the business, and providing frequent updates as the situation develops to all stakeholders. While it’s obvious how important it is to take care of your team, don’t forget that everyone has a spouse, parent, or child who might be severely impacted. So anticipate, respect, and prepare for those second-order effects.” — Ikrima Elhassan, Co-Founder & CEO, Kite & Lightning
Model the ‘worst’ case scenario
Understand your macro-level market scenarios, translate that to revenue impact and decline, and stress test your balance sheet. It is critical to understand the absolute worst-case scenario — and for some companies that may mean 0% expected revenue for the next few months. Make sure to model for 24 months of runway (or the maximum possible) as we are going to see further market corrections and changes to consumer behaviors.
Decide on your contingency plans: start with what needs to be paused, followed by what opportunities can be created. If workstreams are paused, make sure to tell your team why and explain how resources can be reallocated. If layoffs are inevitable, treat those impacted with the care and respect they need. And remember to provide those remaining on the team, the motivation and guidance needed to succeed.
Stabilize to the ‘New Normal’ and Focus on What You Can Control
Now is the time to build enduring capabilities. Adjust the team’s focus, business plans, and operations to reflect the new reality. Work with your organization’s leaders and advisors to re-assess (and if needed, radically change) your 2020 strategy and product roadmaps. It is important at this time to double down on what you can control — and that does not need to be, nor should it be restricted to defensive actions alone — find opportunities for offense. Are there ideas or pivots you have thought about but not had the bandwidth to explore? Now may be a good time to pause, look back, and take stock of current and future opportunities for the success of your business.
“Given we sell hand soap and cleaning products, we are in the small minority of businesses that have seen an increase in demand. In order to meet this unexpected growth and service our customers in a timely manner, we have shifted much of our marketing team over to fulfillment and customer service. Everyone is in an all-hands-on-deck mode, willing to wear widely different hats for the time being. And despite this increase in pressure on our operations, we have decided to take steps to slow down e.g., instituting split shifts in our warehouses to keep our teams safe and de-risk longer-term disruptions.” — Sarah Paiji, Co-Founder & CEO, Blueland
Having a framework and examples of how others are approaching these difficult challenges today can help us make strides in the right direction. For more leader quotes and advice, read the full article on Linkedin.
Leading Through a Crisis: A Practical Guide for Founders was originally published in The Forecast on Medium, where people are continuing the conversation by highlighting and responding to this story.