Emphasize core blocking and tackling skills to carry through crisis
The COVID pandemic affects us all. Our innovative culture instantly responded to the challenges of managing and defeating the virus. I am confident we have the strong technology and social foundations to renew our innovative and productive economy.
There is no “normal mean” for startups. Some find themselves positioned to deliver great value in a time of social distancing and virtual meetings while others express concern their markets may slow for months or even years. In business and football, your team wins games on fundamentals.
Understand and respect employee concerns
We live in uncertain times on an emotional roller coaster of successive news cycles. Expect team culture and enthusiasm for the startup journey to fade. Employees, their families and friends are frightened and look to you for leadership.
Never take employees for granted. Different personalities respond to business threats in different ways. Employees may not directly express their concerns. While most people try to separate work and personal matters, people and forces outside the company influence our responses. This is a time for quiet and confident leadership.
Respect salary commitments. Always review any plans to modify standing salary agreements with counsel.
As you make tough decisions, understand your own humanity, take care of your health and be positive. Above all, be genuine and direct, transparently share your plans and go the extra mile to help employees absorb change.
Directly engage with customers
I encourage you to make customer relationships personal. You need to be the face of the business, especially in tough times. Be empathetic, positive and never desperate. Customers remember how you treat them when their business (and yours) was under severe stress.
Message confidence and enthusiasm about helping customers restore their own business momentum. Be curious. Actively listen to and understand their challenges to identify new opportunities. This is a wonderful chance to learn.
Reach out to customers with phone and video calls. When scale makes this difficult, create a plan to leverage team members. Please moderate the temptation to reach out with frequent email blasts and recorded video messages. When possible, communicate directly and personally.
Run fast and lean
As I write, the Wall Street Journal reports “At Least a Fourth of U.S. Economy Goes Idle.” Every element in your company’s value chain struggles to survive in their own reality. Some form of recession lasting several months seems inevitable.
Building a company in this economy is very different from building a company in the good times we still see in our rear view mirrors. As innovators, we strongly tend toward optimism and look for the bright side of every issue. This is a new world. Reach out to your coach, investors and board members. Their insights and perspective may be helpful in arriving at decisions you can own without regret.
Your projections are not likely to align with plan. Test every assumption and be clear-eyed about the time and resources it will take to drive your business through still emerging COVID-19 consequences. Act with confidence. You will never regret making the hard decisions early.
Treat suppliers as partners
It is almost automatic to stretch supplier terms when money is short. Please remember you cannot deliver products on time and at the right cost without good supplier relationships. Work hard to meet reasonable terms appropriate to both sides.
Your suppliers will fall into categories ranging from widely available consumer products to specific components and services available from a single source (key suppliers). Set a goal to develop trusted partner relationships with every key supplier. As appropriate, share expectation about future purchases based on your sales forecast.
I recommend proactive engagement with all suppliers. If you need special terms, ask. This is especially true at this point. If you find yourself in a bind, call and work out an agreement. Many of us survived by agreeing to “pay current” plus part of a big outstanding bill.
Large companies often have access to money at very favorable rates and may be able to help you finance major deals. Be transparent about your ability to meet their terms, make reasonable promises and keep your promises.
Act with compassion
Make surviving to emerge as a robust business your highest calling. It has been exciting to be an entrepreneur in economically prosperous times. By contrast, in times of turmoil you will not sleep well. You need to act in the best interest of the business.
It will not be easy. Investors, customers and employees may no longer treat you in “friendly ways”. Concerned and acting in their own perceived self-interest, their objectives may never again align with yours. Remember your humanity and act with compassion for others.
Please reach out to me with your own comments and questions.
Other reading: Letter to Launchpad Portfolio Company CEOs, March 2020