Now what? Down-to-earth advice for startups when the world is upside down.
March 31, 2020
How the hell did this happen? How did it happen so fast? When will it end? I’ve asked and been asked these questions dozens of times over the last month.
Even before the pandemic, this year was already off to a difficult start. Australia was burning, we teetered on the brink of war with Iran, and our beloved Kobe died in a tragic accident. Then, the reality of this vicious virus began to set in, as did the ensuing fear and total chaos. Over 250 million Americans are now on some sort of lockdown, and businesses are scrambling to adjust to the new normal.
None of us are immune to this scourge. We have no concrete idea of how bad it will get before it gets better. While we know so little, we can glean some lessons from what we’ve already seen and experienced. I wanted to share some of the ideas I’ve heard from friends, clients and folks in the start-up and VC communities. These are in no particular order and this is by no means a complete list. At the very least, it will hopefully give you something to think about while trying to get a grasp on how to manage through this madness.
1) All businesses, to the extent possible, need to have the infrastructure in place to run a remote workforce.
a. All employees should have necessary IT to work from home.
b. Pay attention to how things are working now, as we’ve all been forced to go remote. What’s not working? More importantly, what is working better? Start thinking about how to bring those efficiencies “back” or keep them when everyone returns to the office.
c. Embrace remote work versus dealing with remote work. Embrace this new world order. It just may allow you to hire more people across the globe to diversify your geos and make hiring easier.
2) Be maniacal about cleaning. Not cleaning house, cleaning your office. I’ve been in a lot of startup offices and sometimes…well you know. The Costco size red licorice container that’s met more hands than a candidate running for office, the M&M bucket that’s had the same number of hands inside, the dishes that were gently handwashed and left on the counter to dry, and the almost empty hand soap container that requires gravity to make its way out of the bottle. All that needs to change. Continuing best practices of hand washing and disinfection will help not only against the next pandemic but keep your workforce healthier overall.
3) Create and enforce a real sick policy that sick team members or guests should not come to the office. No meeting is so important that it can’t be rescheduled or moved to virtual. Most companies have sick policies, but most employees in startups feel tremendous pressure (real or imagined) to be in the office.
4) Consider programs and benefits that can help employees in times like these. Perhaps your company can offer remote access to mental health professionals who can help the team during this time. Telehealth access is something else to consider.
5) Understand your healthcare plan better than you did. What options do you have to furlough employees versus layoffs? Do you know what your monthly burn would be for simply paying benefits if it comes to that?
6) Think about the supply chain and how that will be affected. If you make a physical product, you should consider multiple geographies for production and parts.
7) Takedown money at the first sign of disruption. If you have a debt line that you haven’t taken down, do so. You want to be the first in line at the bank, not the last. But before touching the line, which you’ll need to pay back, ensure you have a COVID-19 operating plan in place that allows you to be methodical and disciplined about how you use that resource.
8) When raising money, consider what type of entity will be affected the most during a pandemic like this. For instance, a venture firm that doesn’t use leverage (debt/banks) to fund its investments should be relatively weatherproof through times like these. A PE firm that relies on debt may or may not be able to access it during a crisis. While the VC might be able to add funding in times of trouble, the PE firm may not. This isn’t a blanket statement, but I’ve seen this dynamic play out.
9) Consider setting aside some cash to deal with employee emergencies during this time. Can your startup afford to keep a slush fund of “X” to be prepared to assist employees in times of emergencies? Some can, some can’t.
10) Focus on your communications plan internally and externally. If you don’t have one, make one ASAP. What will you tell your customers and employees? Everyone seems to have a “stock” message this time around. What, in particular, do you have to add to the conversation internally and to all your stakeholders?
11) Understand what constitutes essential travel. Look back and figure out what essential travel really means. For instance, is it a return to normal where people are on planes all the time when things normalize? Or what have you learned these past several weeks that might change this dynamic in the future?
12) Have a hibernation plan ready at all times. The next time something like this “hits” what is the plan? Know it today. Don’t force yourself to plan under duress. There’s no other way to explain what we’re all going through other than to say, “this sucks.”The daily uncertainty, the rising death toll, anxiety about our friends, family, loved ones and our companies is paralyzing. But we will get through this and things will get better. Of course, the question none of us can answer is: when? While there are so many things we can’t control right now, there are steps to take to help mitigate the turbulence and be better prepared in the future.
I wish you nothing but the best. Take good care of yourself and of each other.