Either we are talking about lethal viruses, recessions or wars, what really makes the difference during these hard times is always people’s behaviors. Individuals have the power to choose how to act and influence their environments. If you think about it, the same happens in business. Whether we are talking about suit and tie investors or jeans and t-shirt CEOs designing new products in dusty garrets, what really makes them stand out from the crowd is their willingness to get resiliency come up to the surface. To create rather than destroy, to transform and adapt rather than being swept by the tide or — even worst — being wiped out by turmoils.
From leaders to laggards.
That’s nothing new: history is a repeating cycle, a dog biting its tail. Just as 2007 marked the beginning of an economical slide with the subprime mortgage crisis, we are now in the middle of another turbulence that is shaking up the whole world and its markets, COVID-19 — “the black swan of 2020” as named by Sequoia Capital.
Dow Jones Industrial Average index registered “the five biggest one-day points falls” in its centenary history. The same happened for Wall Street’s “Fear Gauge”, with skyrocket levels which were only seen during the financial crisis ten years ago. We see high net worth individuals battening down the hatches by “making ructions pummeling fortunes” — as Wealth Management magazine reports — and cash-seeking investors for investment opportunities or balancing the cost of margin calls after borrowing against stocks. In a nutshell, it is not hard to understand that we are facing a giant again, with all the consequences that this implies. But when the going gets tough, the tough get going.
The best weapon to defend ourselves against adversities: being ready to change.
Sticking to pessimism is exactly what you don’t need to do in such moments. What if the rollercoaster could stop on top and remain there to enjoy the sightseeing instead of falling? After all, many companies established their worldwide presence by starting their journey during unfavorable times. Market disruptors such as AirBnb, Uber or even Whatsapp came up just right between 2008 and 2009 and this should teach us what was mentioned at the beginning: the willingness to fight for survival.
The Sequoia Venture letter sent a few days ago to its CEOs and employees teach us: “Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances. In some ways, business mirrors biology. As Darwin surmised, those who survive “are not the strongest or the most intelligent, but the most adaptable to change”.
Set yourself up for long-lasting success.
A great hint for scale up-hunting startups to survive is to focus on growth strategies and technology. As serial entrepreneur Jim Kerr reports in one of his blog posts, “tech progresses more or less independently of the stock market. So for any given idea, the payoff for acting fast in a bad economy will be higher than for waiting”. Indeed, there are plenty of measures that companies -from startups to behemoths can take:
first, organizations — either B2C or B2B — are made up of people. Try to rethink the customer journey, evaluate and plan to track pain points that might have changed while facing tough moments and anticipate moves and needs.
Second: exploit the blue ocean strategy. Consider that during these times there might be less competition, yes, but rather than focus on that, concentrate on creating space.
Third: amalgamate teams; foster collaboration and support. Engage them to improve productivity.
Last but not least, among the plethora of examples that could be made, think about big players as Deliveroo and Amazon selling medicines, food, or even masks. At a point where the world is at a standstill and some companies are on the verge of collapsing, agile startups continue their scale-up, strong of their ability to enable disintermediation and by relying on digital, disruptive models. They do not only allow to bridge the gap between people and their needs by tackling them through technology, but also break down barriers and overcome hurdles.
All in all, surviving difficulties that might come along the way can improve the future immunity of startups. It is too easy to come up during good times. Let’s try during bad times and see. It is not just the pace of change that matters, but the direction and the tools that help one reaching the finish line.