In the span of a few short months, the entire global economy has changed. The way we work has changed. Even the way we live our daily lives has changed. It’s like there has been a huge tectonic shift in every aspect of life and business. Nobody knows with any certainty what the “new normal” is going to look like, whenever it finally arrives.
What we do know is that many businesses will survive this economic turmoil just as they have in the past, and when the opportunity presents itself business will again be thriving. These businesses are the ones that are able to remain agile and adapt to a rapidly changing reality.
Tech and SaaS companies are ideally positioned to ride out this economic uncertainty.
In this post, we’re taking a look at how you can thrive during this time as a growing startup.
1. Don’t panic!
Markets have hit record levels of decline not seen in over 30 years. While the news might be overwhelmingly grim right now, staying calm and focusing on what you can control in your business is critical for survival.
Making hasty judgment calls and snap decisions in a stressed out state can be detrimental for the health of your business at any given time, but especially in the current climate. Staying focused on core capabilities and maximizing the value your company provides is essential for your customers and employees.
2. Look to history for inspiration
There’s never a “right or wrong” time to grow a startup. In previous global recessions, some of the most well known tech giants were launched and began to thrive and scale into the brands they are today.
General Electric
Launched in 1892 as the world entered a 16-month recession with a business downturn of 40%. Their current valuation is $95 billion.
Microsoft
With the global economy crippled by a trifecta of the 1973 oil crisis, a major stock market crash, and an ensuing 16-month recession, Microsoft launched into the public domain in 1975. Their current value is $125 billion.
Salesforce, Google, Facebook
All of these global leaders launched just as recessions hit in the late 90s and early 2000s. This didn’t stop their quest for growth, and today they have a combined valuation of nearly $73 billion.
Many of the world’s biggest companies started in recessions, without the added advantage of the internet to draw new customers to them. They found ways to remain competitive and agile in order to grow during lean times. The determination to succeed as a startup, no matter what, is critical.
3. Stay focused
Launching a startup is challenging at the best of times. And you may find that the current economy has created a lot of unexpected obstacles between you and the growth plans you had nicely mapped out at the start of 2020.
This is the heart of what entrepreneurship is all about. Finding and creating opportunities in your market that your competitors might have overlooked or given up on, and mapping out creative ways to lean into any obstacles and setbacks.
By keeping a focus on the things you can control, and remaining agile in your approach to growth, your chances of riding out this recession are higher. Your competitors may not be so calm during the chaos, which will give you even more chance of success on the other side.
4. Keep consistent
Don’t give up on your growth roadmap. By remaining consistent with your marketing and making adjustments as needed, you’re placing smart bets on the direction of your company.
This ensures you’re still front and center of your audience at all times, and can position yourself to thrive once the economy picks up again.
5. Be flexible with your team and embrace remote work
With the global workplace suddenly thrown in the deep end of learning how to function remotely, it has given companies the ideal opportunity to explore how they can run teams and make swifter decisions with less in-person contact.
Twitter and Square have fully embraced the remote work ethic, allowing their employees to work from home “forever” if they choose to.
In Buffer’s State of Remote Work report last year, statistics showed that 99% of people wanted to work remotely, at least some of the time, for the rest of their career. If there was ever a perfect time to learn how to develop a streamlined remote-first business, this is it.
6. Look for opportunities to pivot
“Pivot” has been a word we’ve seen a lot of in recent months and this point is contrarian to #4 “Keep Consistent.” There’s a delicate balance that leaders need to keep and continue to manage their teams through as different options come up. If your business has an opportunity to broaden its total addressable market (TAM) without jeopardizing the stability of the core business it could be a good option to consider. The businesses listed in #2 saw opportunity, moved in, and when the market turned around, they were the best positioned to accelerate growth faster than anyone else.
7. Raising Capital
While investing may have taken a dip in recent months, many companies are still finding funding opportunities for growth capital or for extending their operating runway. The US government Small Business Administration has been offering several loan programs, including the Paycheck Protection Program. VCs and angel investors have slowed down considerably as the economy takes time to stabilize. It’s best to consider what your business needs for long-term operating and then consider the cost of each financing option.
In summary
If there’s anything we can learn from past recessions, and the current boom for many tech companies, it’s that startups need to learn to become more agile, run leaner, and make more strategic decisions about their marketing and direction in order to move forward.
There’s no doubt there are challenging times ahead. But businesses that find ways to stay consistent and grow over the next year or two will be perfectly positioned to thrive in the next boom economy.