Surviving This Cycle
Hey folks, I know you’ve heard, seen and probably experienced a lot of the fallout from the “downturn.” In fact, you’re probably tired of hearing about it and just can’t wait to move on. Trust me, I hear you and I desperately want to move on too. Unfortunately, we just can’t. Through no fault of ours, the world is just not in a great place at this time and for most of us, this is the first time we are experiencing a major economic slowdown as entrepreneurs.
The good news is that bad times pass and this is just one of a series of cycles we’ll experience in our lifetimes. A great use of our time and resources now will be to take lessons from our current experience and from previous downturns, and build stronger businesses. You’re the best person to run your business, so I can’t give you specific advice on what to do, but I can share my general thoughts that can hopefully help you shape yours.
First, don’t panic. Remember why you started this. If we invested in you, it’s because we could see that you were here for the long term and not looking to make a quick buck. By choosing to solve the problem you’re solving, you showed that you were prepared for the long hard road ahead. Always remember that. We believe in you and will always have your back.
Now re-evaluate your business. Accept that things are different now and you’ll have to adapt to stay alive. Make those hard decisions faster. Run that product experiment faster. Make every spend worth it. All within reason. If you’ve yet to find product market fit, that should be your core focus now. Be honest with yourself and stop burning money on growth efforts that don’t significantly push the needle forward.
Religiously watch your burn, but very soon you’ll need to raise more money, so focus on growing your key metrics. Remember those 3–4 metrics we said you should concentrate on? Now is the time to be very particular about making sure they trend upwards. Your next set of backers will want to see tremendous growth on your deck before they even take that call with you. Let every part of your business be tied to growing those metrics. If you’ve spoken to me, you’ll know that I’m biased towards growth in metrics around actual product use over vanity metrics that disappear once you drop advertising spend. Now’s the time to remember those conversations.
If it’s not essential to making your product better, don’t spend on it. Whatever ‘it’ is. In the same vein, a common mistake is to conflate being cheap with being frugal. If it’s going to dramatically improve your product, drive lasting adoption and consistently grow your revenue, don’t be cheap.
Always reach out for help as soon as you find that you’re stuck. The earlier we know about your situation, the faster we are able to help or proffer solutions. Waiting until the last minute makes it hard for everyone, especially yourself.
Finally, be kind to yourself and your team. Remember, it’s no fault of yours that things are looking rough now. Show empathy if you’re letting go of staff, forgive yourself if you have to cut salaries, allow yourself to be vulnerable when needed. Doing what you do is hard and we know it. Be kind to yourself and remember it will get better if you take the long view.