covid-19 is not the world’s first pandemic, and it will probably not be the last. Similarly, this is not the first time the global economy is facing challenges. As in past crises that shook the world, entrepreneurs must keep a cool head to come up with a strategy that can steer their startups through these difficult times.
Startups face many challenges in the days ahead. The biggest is the sharp decline in business activity in recent weeks due to the current lockdown. Startups may be familiar with working remotely and using online spaces to minimise cost and overheads to run their businesses. But they now also need to look at their future business operations, including burn-rate, sales forecasts, supply-chain disruption, lost fundraising opportunities, team headcount reduction and optimising capital spending. Running a business always entails highs and lows. An unprecedented event such as the COVID-19 outbreak presents some opportunities along with concerns for the startup communities. As COVID-19 brings the world a standstill, the startup community must find a way to continue to move forward in these challenging times.
So how do startups continue with business as usual? They must first accept that the “as usual” they are familiar with may have changed. What is the new way of functioning for startups, then? Let’s look how at how startups can approach this new world one day at a time.
Reassess your goals
Startups need to take another look at their goals for the next few quarters and introspect whether top-line growth can still be achieved in a phased-out manner. Given COVID-19’s impact on the business landscape, organisations need to adopt a more conservative outlook. Startups should first analyse the damage the business is going to suffer due to this pandemic and understand the repercussions. They can then put into action a plan to mitigate these losses. Bounceshare, an urban mobility solution provider, has announced a reduction in the minimum fare for its self-driving two-wheeler rental service. It has also waived off the security deposit for new users, ensuring easy access to scooters in case of an emergency.
Innovate. Innovate. Innovate.
Organisations must reinvent themselves. The 1970s recession gave the world Apple and Microsoft while the global financial crisis of 2008–09 saw the foundation of Airbnb. Startups need to analyse the changing trends now, strategise their business model and look at new opportunities to generate revenue. Airmeet, an India-based online platform to host, discover and attend fully remote events, such as professional meetings and conferences, recently received INR 22.20 crore in a fresh round of funding. This startup, mentioned in our previous blog, is looking to improve the online meeting platform capabilities and is in talks with many conferences that plan to go interactive. Airmeet is trying to recreate a live experience digitally by providing participants with choices, such as interactive seats, networking lounges, backstage, floor, claps and audience reactions.
Protect your greatest resource — employees
At its core, a business needs to have its heart in the right place. During a crisis like this, business leaders must communicate clearly and effectively with not only their clients and vendors but also their employees. One of the first things Hireo, a talent recruitment platform, put forth was its plan for employee safety. They introduced standard protocols, such as work from home and no business travel, and requested their employees not to take up any personal travel unless necessary. They have also been sharing critical government-approved and scientific data around how to manage personal hygiene when they are working remotely.
Be prepared to be around for the long haul
Things look bleak for startups as fundraising might be harder in these market conditions. However, great companies are built during challenging market environments as it helps them focus on what is important and plan for the difficult times. Instead of looking at the targets missed, startups can concentrate their efforts on leveraging new opportunities. It gives startups a chance to reinvent themselves. And who knows, when the fundraising starts next, this may set them apart from the competition and put them in the spotlight for critical investors. Even established businesses are opting to reinvent themselves. Recently, the Mahindra Group began manufacturing the much-needed ventilators for Covid-19 patients.
A new way of economic thinking
During this COVID-19 outbreak, investors are advising startup founders to look closely at sales forecasts, hiring plans, expenses and every other aspect of their business. Turmoil can also present opportunity, as changing markets and circumstances create new challenges to solve and opportunities for startups to grow their businesses. Difficult times bring out the real character of company leaders. Be human but do your best to keep a level head under pressure.
Entrepreneurs are resourceful, innovative and think out of the box. They are risk-takers and are flexible and hardworking. Now more than ever is the need to display these qualities. Some entrepreneurs are focusing on technological innovations to assist medical personnel in dealing with the outbreak.
While the First World War changed the world as people knew it, it was the Wall Street Crash and the resulting depression that played a far more critical role in improving the economy. It brought about a new way of thinking. People must remember that this pandemic is not the end of the world. What it will do is bring about a new way of running a business. In the fast-moving and uncertain times, if you are running a startup, you will be tested in unimaginable ways as a business leader, and you will have to think quickly and act decisively. But as every entrepreneur knows, one’s entrepreneurial journey will be filled with challenges. Success depends on how you face these challenges and forge ahea