Defense or Offense? That is the Question!
We all know this is a time of many uncertainties, and a time to take stock of what is critical to our health and well-being, both personally and professionally. COVID-19 is partial to no-one and available to all.
We must take care of ourselves, our family, our friends and community. We must measure our resources and monitor how best to utilize what we have. We must be grateful and hope for a better tomorrow. This too shall pass.
In the world of startups and entrepreneurship, there is much to be concerned about. Startups are always vulnerable even in the best of times but there are things you can do to extend the runway and outlast this crisis period. There is advice for both a Defense and Offense approach.
Defense is like survival mode. You have to go into defense mode immediately after the crisis hits. This helps you manage through the crisis utilizing only what is necessary to survive. You must conserve the company resources until the clouds roll away.
Here are some tips from Geekwire.com:
- Survive: Stay healthy and follow the basis health guidelines during COVID-19 crisis.
- Cash is King: The Company won’t die for lack of ideas but it can die for lack of money. Try to conserve your cash-flow and if possible, to have at least 12 months of cash on hand.
- Forget about Raising Money: Angels will continue to invest but expect smaller rounds and lower valuations… but Fear Not, if you are in an Accelerator Program!!!!
- Revenue is Likely to be Curtailed: You shouldn’t count on contracts in the pipeline to close. Most companies, big and small may be in survival mode.
- Opportunities: If possible, shift some of your business practices and services to help the (COVID-19) crisis solutions. GM shut down regular production and made ventilators!
- Downsize: Many companies have to scale down to essential staff and supplies. Salaries may need to be cut and you may have to let go of Contract help.
- Non-Equity Cash Raise: Look for sources for non-equity cash. See if you can qualify for government grants. Explore SBA programs put in place to help small business in crisis.
Offense is growth mode. It’s a mindset of no restrictions where nothing seems impossible. It’s when you think through ways to outweigh your competition. It’s a time to double down when others are pulling back. It empowers you to take advantage of weak competitors and do things and take risks you might not ordinarily take to gain market share and open the gap between you and your competition. It strengthens the position of your startup.
What better time to be on the offensive?
Here is a list of questions to consider while playing offense: (in an article on nfx.com)
- What is my biggest advantage?
- What are my abilities to grow now, faster than before?
- What can I do that my competitors cannot?
- What will my competitors cut that we should continue investing in?
- What are the customer struggles during this crisis?
- What are the changes that our competition made and how has it upset the customers?
- What can I do to take advantage of this?
- What ways do I need to be more aggressive than my competitors?
- How can we come out of this struggle stronger than our competitors?
- If you raised money, and your competitors did not, what is the best way to use the money?
- What is the best way to take advantage during this crisis to get a leg up from my competitors?
Accelerator groups are utilizing technology to continue mentoring and guiding young startups to grow. Continue to be pro-active and think out of the box as to what your industry is doing and what bold moves you want to make. This is not a time for the faint-of heart…don’t hibernate!
Hang in there, this too shall pass!