But it’ll be the innovators and the startups that thrive.
It took my industry 48 hours to go from around 40% of our customer base, to 0%. Many could feel pretty glass half empty over that, but I sought refuge from history.
Here are just a few companies that started up during a crisis and/or recession:
- General Electric
“Bad companies are destroyed by crises, good companies survive them, great companies are improved by them”. – Andy Grove
I vividly remember the intense coupling of awareness and anxiety that bubbled when you’re told something you’ve invested so much on can’t be used.
At 11:59 pm on March 25th, our Prime Minister Jacinda Ardern ordered our country into full lockdown for a minimum of four weeks (which ended up being 5.5 weeks). Although the international borders were closed prior to this, our last few crumbs of customers were now completely inaccessible.
Our new platform wasn’t guaranteed to make a difference in sales, we’d need to temporarily downgrade our current site for an unknown time, and I was onboarding a developer I’d never worked with before. It was high risk, unknown reward. But even with all that risk, none of us imagined 100% of our audience would disappear.
So, how does a small start up cope through something so devastating? We kept it to four key rules:
- Get it done: Use this time wisely to complete all our outstanding tasks with absolute aggression.
- Look for opportunities that our competitors can’t afford to chase right now.
- Ask for help.
- Stay positive: We’re so new here that we have no financial commitments to stop us.
When making the decision to move our offering from a DIY website builder to a fully-functioning platform, I looked for help from the people I knew best. Colleagues, friends, and business associates provided some great feedback:
- Don’t think about what you can afford right now, ask yourself what’s the ratio of cost vs predicted loss if you don’t upgrade? Can you afford that?
- How would you feel if a competitor built this platform instead? Could you get over it?
- If you’re going to do this, do it. Don’t you dare press the go button on this if you’re not all in.
- Consider the end result from a positive and a negative angle. What decisions did you make to achieve either?
In March 2020, we planned to go live. The acceleration of research, development and marketing was getting intense within our small team of five. Just when I was preparing everyone to press the go button, it was dramatically put on hold.
Fortunately, we predicted this. We kept on top of the trends and the data knowing about a month out that a lockdown was imminent.
The boot was on the other foot
Likely the first time in history, we were contacting our SAAS providers, subscription vendors and unexpected invoices to negotiate better rates. In fact, up to 75% of our overheads put us on free subscriptions until things returned to normal.
When they did “return to normal”, we negotiated a staunch deal to keep us as a paying client. Afterall, we’d had five weeks to realise that our business could still run without all these time saving, schedule building, project management tools.
It’s important to recognise this.
We’re often complacent with the costs of some of these tools or services. Many of which are failing during the COVID-19 crisis due to the failure to prepare and keep an emergency fund.
“Companies are showing their true values during this crisis, and we’re not impressed”, – anonymous.
I used the below templated email to save us nearly $420 a month on subscriptions:
Hi [account manager / company],
We’ve now been a customer of yours for [#] months/years and have spent approximately [$#] on your software.
Unfortunately, we’re now in a situation where we cannot justify something that is not critical to our business. I of course see its worth, but with little to no customers coming through the door, our board of directors requires significant reduction in costs.
I would like to negotiate a temporary [important to use the words ‘temporary’ and ‘negotiate’] suspension of our account, or a significant discount. This will allow me to convince stakeholders and the board to justify keeping your service as part of our overheads. We have approximately 7 days to decide who we will keep.
You’re competing with other suppliers here, so only the best discounts will be accepted.
I look forward to using your service/product further.
All but one replied to this email, and 75%+ accepted a free or >80% reduction in fees. Afterall, most of these big SAAS players have the collateral, they just need the active numbers for their shareholders.
A few months after coming out of full lockdown, our subscriptions remain at a 60% decrease than what they were.
Taking a step back during a crisis
If my work in the resilience space has taught me anything, it’s to consider facts vs assumptions.
You have to ask yourself the tough questions but then answer them honestly without the support of false, click friendly media. When we were building the site, the questions were primarily around functionality and resources. By March, these had shifted to the opportunities a crisis can present.
Is this going to destroy our business? How do we actually know that?
Is this a blessing in disguise? Where are the new opportunities we can pounce on before competitors do? We’ve just been awarded five more weeks of development while zero people are travelling or holding any expectations.
In June, a few weeks after the country had lifted its lockdown, we went live.
It wasn’t like the movies where champaign exploded over our monitors, balloons flying everywhere and Queen smashed onto the radio. It merged over slow and was live 48 hours before we even told anyone. We wanted to remain calm and collected; afterall, if the last few months had taught us anything, it was to remain humble and calm.
Never stop innovating
To assume your business is exempt from a crisis is ludicrous. You simply don’t know what’s coming and you will never have everything in place. I’ve found a positive step to get through it all is to continue to build, develop and innovative exciting concepts for your business.
Our first release of the new platform is classed as V2.0. The next being 2.1, 2.2 and so on. We’ve mapped out the requirements up to 2.8 with another six being researched right now. This means, over a 24 month period, we have a pool of tasks and projects we know will be actioned regardless of what’s happening in the world.
If you rely on money to be able to innovate, then you’re running a business destined to fail. During a lockdown, you don’t have those resources anymore, but what you do have is time, space and energy.
We used that small window to map out a system and process where experienced Tour Guides could be recruited, onboarded and put through an induction in one click. Yes, one click. Our research shows there isn’t a supplier anywhere in the world who can do that.
By taking a look at what we have vs what we need, we were able to effectively map out innovative concepts for the future.
So remember, you just have to laugh at the situation sometimes. I sure did when I realised we’d lost all our customer base for the next five weeks.
They’re coming back, kind of, but what is keeping us positive and active is to continue with the plan. There are some kinks in the road, but humans have dealt with worse.