How To Keep Your Startup Game Strong Amid Covid-19 Lockdown
We are now living in the unimaginable. Really, who would have thought that a tiny virus could bring the entire world to a halt? In just four months, global growth has witnessed an aggressively falling curve—the IMF now projects that the global economy will shrink by 3% in 2020, a bigger hit than in the 2008–2009 financial crisis.
If we talk about the current scenario, more than 4 billion people around the world are in some form of lockdown due to the Coronavirus. But this too shall pass. The pandemic will be over one day but will things ever go back to the way they were? Or the normal will now have to evolve to the #newnormal?
And if it’s going to be the #newnormal, how should businesses adapt to it? Especially Startups.
For the startups of the country, this pandemic might prove to be a bigger hit. Also since they work with slim teams and resources and have far less cushion than a scaled enterprise. Even though facing challenges and dealing with unforeseen circumstances is not new for startups. This particular situation is unprecedented and has arrived completely out of the blue with threats that no one could have imagined.
As the mental normalcy builds and lockdown eases, it’s important for startups to not just hope for the best, but be proactive in terms of leading their baby into the right direction. Here is our 9-step playguide to keep your startup game strong amidst Covid-19.
1- Expect a Volatile Market
CEOs/Founders must open shop expecting volatility in the demand of their service/product. There are a range of potential scenarios based on the evolution of the virus itself and its impact on businesses. Some scenarios include cyclical outbreaks, rapid remission, prolonged chaos, and flattened curve. In case of any of these situations, a company needs to be ready to change course on a dime. All measures must be easily reversible and scalable.
2- Liquidity planning/ Cash Flow Planning
Since revenues are difficult to forecast, it is critical that leaders double down, evaluate & move to a cash flow-based planning.
Managing liquidity efficiently is a core challenge that startups are facing at this point; managing burn and making sure that there is a runway for at least 18-21 months is important. Exploring new revenue sources, as the core stream may have been affected due to the pandemic; is also a good idea.
Lastly, as fund-rasing may be pushed back till there is clarity, it’s only imperative to look at bank statements on a day-to-day basis.
3- Protect Your Employees
Unlock will not happen overnight, it will happen in a phased manner, gradually releasing restrictions. We are going to have to really go through a series of steps to ensure that we are complying with the guidelines, at the same time, ensuring that our people are safe. Let’s not cut corners when it comes to safety.
At the offices there should be a series of checkpoints. There should be holding areas for colleagues to ensure that a red flag can be raised if someone’s feeling unwell.
4- Work on Your Contingency Plan
The rules of the game have changed due to corona. Planning for contingencies if things go further south is the only resort.
Startups usually have a short-term business continuity, but with this outbreak, the focus needs to shift on the unavailability of key employees as well as leadership. The idea is to search for backups for everything, and ensuring that the startups have a migration plan in place.
5- Work Near Home
Kerala government recently claimed that they are looking to set up work-near-home facilities using unoccupied buildings, hotel rooms and even houseboats as co-working spaces near employees’ homes. We think that’s a great idea.
Work-near-home facility for employees could be a solution for issues like poor internet connectivity and power failure that IT firms that have staff on the work-from-home arrangement are facing. Distractions could be minimized and safety could be ensured.
Co-working spaces can be a blessing in disguise here. They function without restraining lease, offer a more focussed environment and exist in almost every locality. Working near home also means reaching the premises without taking any public transport.
6- Go for Flexible Space Options – Coworking Space
Flexibility and scalability are the two pathways out of this doomed situation.
Finding a flexible space to operate from, in this case a co-working space, which doesn’t bind you to a 6-year lock in, is the way forward. They convert a capital investment into an operating cost – you are basically paying a service fee.
7- Enable Work From Home
A detailed planning activity, where we need to identify which employees really need to come to work, even after the lockdown is lifted is necessary. Others can continue to work from home. That clarity is important for any start-up right now so they can do effective cost cutting.
8- Welcome Remote Monitoring & Automation
Going forward, the industry would need systems that enable remote monitoring of processes and machines.
9- Fixup Your Supply Chain
Besides drawing up social distancing norms, companies should focus on fixing the supply-side. Focus on securing raw materials, managing costs, up-skilling your workforce, and getting back workers who may have migrated back to their villages.
Startups thrive on this motto, “Analyse, Learn and Pivot”. Now, more than ever before, is a good time to look inwards. This will not only help you develop a more relevant outlook but also bring you closer to all your
While it is true that it will take at least a few months for the economy to throttle, one must not lose sight of hope. One must focus on the roses, instead of thorns. Doing so will enable your startup to come out of the storm better, smarter and healthier! stakeholders.