Mentor Journey: How to Lead Your Startup Through Challenging COVID-19 Times
Your startup journey is about to get very interesting! Here you are working hard to raise funds, build a team and raise awareness about your brand and product/service. That was interesting enough. But now you have a completely different kind of interesting challenge going on: There is an epidemic on the rise around the world with many possible economic ramifications to follow.
Which begs the important question: “What can you do as the CEO of your startup and as a leader?” First of all, do not react. Your focus must be on your team, your customers and sales and finally your investors.
Bootstrap, Bootstrap, Bootstrap
Go over your budget and cut out all unnecessary spendings and figure out a way to make your funds last longer. Go over your payroll and figure out a way to temporarily reduce it by 30 to 40%. Talk with your team, show them how keen you are on not letting anyone go in the next period and showcase how a temporary budget cut in salaries can buy the team more time together to finish what you all started together. Make sure to highlight that you, the founder and the rest of your co-founders will make the highest reduction to set the example for your team.
Enforce a Work from Home Policy
Combine that with a work from home policy. In a way, you are reducing costs of daily transportation and other minor costs like food and coffee. Your team will also be safe from any unnecessary virus exposure. Two birds with one stone.
Figure out with them how you can make working from home productive as well as bonding to the team as a whole. If you have a show and tell Thursday, keep doing it, but online. If you are used to hanging out after work, do that, but online. Don’t change the schedule, only the medium of interaction.
Discover Potential Strategic Sales Targets
In the upcoming phase, you are not to initiate any scaling activities that require you to burn cash.What you are looking for are strategic customers that will give you much needed credibility. In other words, you are looking for customers whose brand name on your client list will make your next sale negotiation easier. You are also looking for those deals where you can make quick cash. Try to balance between both types. Quickly build your sales funnel of potential customers and use your network to engage the right people on the customer side.
Hard Conversations with your Investors
Now that you have put some kind of plan together, talk with your investor(s) about it and ask them for their support in finalizing those sales deals by leveraging their contacts and support. You should also initiate negotiations with them to extend you a line of credit or some emergency funds, payable by the end of the year in the form of cash, more shares in the startup or a combination of both. Just make sure that some emergency funds are there for you when and if needed.
If there was ever a time to earn the title of a chief executive officer (CEO), it is now. The current situation is a great opportunity for you to make your team believe in your leadership, make your customers your best allies and make your investors your top promoters. And most importantly, stay optimistic and open to making changes.Remember, some of the world’s best innovations came out of hardship. Why? Because tough circumstances force you to consider the roads less traveled.
Goodwill and Respect