So many requests from #Entrepreneurs for online seminars to share survival tips for #startups in a post #COVID2019india world. Thought of sharing this to reach more people. (1/14)
I survived 2 downturns earlier - first in 2000/2001 dot.com bust followed by 9/11. The next few years were bad for #ecommerce. That's when we launched Fabmall supermarkets in 2002, later acquired by @AdityaBirlaGrp (#More supermarket), now acq. by @amazonIN (2/14)
The 2008 global financial collapse was again terrible. This was so bad that I was missing 2001. I managed to survive 2008 as well. (3/14)
Common attributes in both downturns - job losses, shutdowns, massive drop in valuations, no funds, no capital, big drop in revenues, unable to see beyond a quarter. Surviving every month was the agenda.(4/14)
But things are different this time. In addition to all the above attributes, people are dying. Millions will die because of the #CoronavirusCrisis Millions more will die of hunger. (5/14)
We are in un-chartered territory. No one knows what will happen. #Entrepreneurs and #startups must read all survival tips with this rider - no one really knows. With this assumption, here are a few tips. Take what makes sense. (6/14)
Lesson 1: This too shall pass. Good times fly fast. Fortunately, bad times also end, even if they crawl. Chin up - good times will come AGAIN. (7/14)
Lesson 2: Downturns are good. #startups especially funded ones sometimes get into bad habits in good times - excessive marketing spends, trophy hiring, impractical expansions. Now's the time to get rid of these habits and make things sustainable. (8/14)
Lesson 3: Change org structure. In good times, around 60% of headcount is focused on directly / indirectly impacting revenues. Push this up to 85% or more now. (9/14)
Lesson 4: Forget margins. Focus on cash flows. In 2008, we enjoyed 40% margins and 30 days credit with book publishers. In 2009, I personally met every publisher and changed this to 20% and 90 days. It made a huge difference to us. (10/14)
Lesson 5: Communicate. Talk to employees. If as a #Founder you are not sure what's going to happen, spare a thought about your employees. If in doubt, over-communicate. (11/14)
While you do all this, review your runway. Any funding in the next 6-9 months will be tough. Do whatever it takes to make your funds last 1+ year. Simple rule: re-negotiate every single existing contract. There are no holy cows. (12/14)
Downturns build steel. #startups who come through can face future challenges with greater confidence. Of course, you also need some good fortune while you try to hang on. (13/14)
Don't forget. This too shall pass. God bless. (14/14)
