“Your job as an entrepreneur is not to predict the next COVID-19. Your job is to predict the fact that things will go wrong.” – Athan Slotkin, AKA The Shadow CEO
Entrepreneurs are problem solvers, they see a sliver of a need not being met and base a startup to bridge that gap. They expect the unexpected. One thing that left everyone running for cover and funds was the sudden lockdown that was imposed worldwide to battle the ongoing pandemic. No one knew how the outbreak of COVID-19 was going to affect the entrepreneur and startup ecosystem.
One of the things that entrepreneurs have to think about is the inevitable fizzling out of their company. Long run planning is the hardest because no one knows what the future holds. There are things that many did not prepare for at the beginning of this year.
The pandemic has hit everyone hard, many have had to lay off employees – unable to meet expenditure, many shut down completely – unable to manage finances, and all of the workforce had to work remotely, one thing that they were not trained for. Some companies were able to stay afloat, pulling out on a flexible framework, while many had difficulties keeping the doors open.
Sectors like health care, cybersecurity and ecommerce saw a hike in their projectiles, while sectors like travel and hospitality fell drastically. One of the reasons for this was the absolute need for these services, they could not be substituted, they could not be rendered obsolete.
And once again Marlow’s hierarchy proved a point in case. Needs like food, sanitation and security cannot be replaced. However the question of factor for form arises. While food is indeed a necessity, the context is incredibly important. While restaurants and fast food centers had closed down for months at end, there was a rise in the demand for raw foods by the general populace. Many started baking their own bread and making food at home.
If you look closely at startups or firms that gracefully survived the close down of the world, you will notice some similarities, somethings that helped them survive the pandemic and the uncertainty it brought with it.
Some companies had a run-out stash of cash that was used when funding was withdrawn or investments were put on hold. This helped them in the first few months of the lockdown and gave them breathing space to manage and plan a bit better for the future.
Things changed very fast, especially the way the customers interacted with companies and their services or products. The same was the way that founders saw growth projections. It went from growth at any cost to reasonable growth with a margin for profit. The first thing was to be able to sustain the firm and then look for ways to make profit.
Customers are fickle in loyalty and in their wants. So firms that realigned their goals to better fit the situation did better in terms of sales. They saw potential when the shutdown happened and moved their service online and tailored their marketing to expand on social platforms.
The company should be more proactive rather than reactive. Building a working framework is imperative to the structure of the firm. However priorities change through the years and it is important to have a flexible framework that can be adapted to the present requirement. And adaptability should also be extended to products, revenue streams, etc. A diversified revenue stream not only means more revenue, but also more ways of reaching more customers with fundamentally different needs as a result of this crisis.
It is proven through many studies that a certain income threshold keeps employees happier, and this then leads to improvement in work and productivity. A company only grows if their employees grow, both professionally or personally.
There are various factors that determine the success of a startup. Unfortunately there is no hard-and-fast rule or a formula. Some things work and some things don’t, it’s up to the founder to see which things are worth following through and which are better to be left as is.