By Fast Company
The COVID-19 pandemic has quickly evolved into a global glue trap. It’s developed a quasi-monopoly on our attention, our freedom, and our money. Surviving as a startup is a roller coaster under normal circumstances, so in times like these, do they even have a fighting chance?
This virus has impacted business development. Major companies around the world, no matter how tall they stood mere weeks and months ago, are now scrambling to figure out their future. Out of necessity, they’ve shifted their mentality from progress to survival, temporarily turning their backs on innovation, strategic development, and new partnerships.
The pandemic has impacted consumer purchasing habits. Supply chains have sputtered to a halt, factories and retailers have closed their doors, and who even has the spare cash to buy nonessential items as the stock market dips to nearly unprecedented lows?
It has impacted the ability of startups to raise investor capital. Investors have a significantly weaker appetite for risky spending now that global markets are going off the deep end. Given our uncertain economic future and the fear that this pandemic-turned-recession may continue to suppress markets for months to come, each day is another giant leap away from investors moving money.
Finally, it has had an impact on people’s ability to work efficiently as a team. In a startup, achieving lofty goals on impossible timelines with limited resources requires peak performance from everyone involved. There’s a reason why founding startup teams often operate out of houses instead of offices. Everyone huddled up in the same room around the clock can be a powerful catalyst for productivity. But with everyone sheltering in place and isolating themselves to slow the spread, how can things possibly hum along as smoothly?
No two startups are the same. The problems we face are unique to us, and there’s certainly no coronavirus playbook we can lean on. However, there are a few north stars we can look to for guidance as a startup community.
LEARN HOW TO BE PRODUCTIVE, EVEN IN ISOLATION
A startup’s ability to be shockingly productive is due in large part to its team’s morale—the mentality that everyone is in this together. Either we make it to the promised land, or we all take the loss together. This bond is forged in the fire of mutual sacrifice, the pressure to execute, and intimate dependence on one another’s performance. When morale is lost, productivity dies along with it.
At Aira, we are firing on all cylinders when it comes to keeping spirits high. We have daily Zoom meetings scheduled at 9 a.m. so the team can sync up their objectives, and another at 5 p.m. to review what everyone accomplished during the day. This structure helps people maintain a strong sense of ownership and acts as a constant reminder of how instrumental we all are to this operation.
We’ve also used Zoom and Slack to create our very own virtual co-working space. From 9 to 5, we run an ongoing all-hands call (people can pop in and out for meetings and breaks). While team members are working, they remain on Slack and Zoom with their cameras off and microphones muted. By simulating an office environment online, we can chat, ask questions, and resolve problems as though we were sitting next to one another. It feels a little strange at first, but after just a few days, you’ll feel totally comfortable in your newly-minted collaborative ecosystem.
FOCUS ON WHAT YOU CAN CONTROL, THEN INJECT IT WITH STEROIDS
Let’s face it—there’s a whole lot going on that is outside our control. But guess what? Everyone is in the same predicament, so we can either dwell on it or embrace it. If you don’t want COVID-19 to spell the end for your startup, it’s important to stay focused on what you can control.
Aira is an innovator in the wireless charging space. We’ve rallied our team around the common goal of focusing on just that—innovation–above all else. Sure, we’d like to work on things that might be more mission-critical, but those tasks include supply chain, production, and business development efforts. Since suppliers around the world are decreasing their capacity and businesses’ development efforts are the last thing anyone cares to discuss, we’re setting our sights on our big picture.
What does this big picture look like for you? If your business is direct-to-consumer online sales and your website is looking a little uninspired, give it a face-lift. If your revenue is driven by digital marketing and your funnels aren’t maximizing conversions, build them out. If your SaaS platform lacks key features, now’s the time to beef it up.
That way, when this thing is in the rearview, you won’t have to start the engine back up after a period of stagnation. You’ll be stronger than ever.
SPEND EVERY DOLLAR CAREFULLY, AND IF YOU RUN OUT, GET CREATIVE
Pandemic or no pandemic, this goes without saying for any startup. Every dollar counts, so spend carefully. As tough as it can be to decide where to cut back, especially regarding areas that were once critical for your business, it’s a necessary evil. When you consider the alternative and the fact that failure to adapt could shut you down forever, it’s easy to see that a few tough decisions are better than the most gut-wrenching decision of all: filing for bankruptcy.
In some cases, no matter how carefully you spend and as hard as you try to cut back, you just won’t have the runway or the cash flow to cover your burn. You may find yourself on the path to shutdown despite your best efforts, and there will seemingly be nothing you can do. In this case, creativity is your only ticket out of the hole.
The people on your team probably have a higher risk tolerance than the average worker. They’re in this for the vision, and for the belief that your business can make an impact, not just for a paycheck. You can offer stock options for reduced pay, rev share or commissions on future revenue, or even some portion of deferred pay with future bonuses to make up for lost time.
Of course, these options aren’t ideal. Your people have given their hearts and souls to your business, and they should be very well taken care of in return. However, if every other alternative is off the table, one of these measures might be the only thing that gets you through. Hopefully, you’ll never have to cross that bridge, but it’s prudent to have a plan B.
Caveat: Before you go into red alert mode, bear in mind there are low-interest loans available to help keep your business afloat in times of crisis. These loans have extremely generous terms (up to 30 years in some cases), and they often do not require payments for 12 months or more. As an example, the SBA Disaster Loan is a serious option for companies in need, alongside other federally supported programs like The CARES Act. CARES is offering forgivable loans to help small businesses cover operation-critical expenses like payroll and office rent for up to two and a half months.
These are unprecedented times. Businesses are buckling under the weight of a disaster that’s impacted nearly every person on earth. And unless your company happens to sell hand sanitizer or conference call software, you’re probably experiencing some kind of financial crunch.
So, in times like these, is it even possible for a startup to survive? The answer is yes. Not only can you survive, but you can actually set yourself up to thrive.
The sun rises and sets on startups all the time, but there’s one thing that makes this challenge different. We’re all in the exact same boat. It’s a problem we didn’t cause and certainly didn’t ask for, but one that we all must face. My best advice is to find a way to be productive remotely, pour everything into the factors you can control, be exacting about every dollar you spend, and get creative if there’s no other way.
We’ll be doing the same right alongside you.
Jake Slatnick, Fast Company