LEADING COMPANIES THROUGH THE COVID-19 CRISIS AND BEYOND!
Written by Yael Eckstein, Director of Marketing at StageOne Ventures
We are now just over 6 months into the COVID-19 crisis, a pandemic that has affected the entire world. Our lives have been changed in many ways, from how we view and safeguard our health through the crisis the global economy faces, to the manner in which we conduct business, including a surge in remote work from home. To date, we continue to adjust and adapt to this “new normal,” learning how to live through the largest health crisis in over a century.
As a VC fund, we partner closely with our portfolio companies and are proud to see how they have continued to adapt, make the necessary changes, and plan for the future through innovative models and frameworks — in theory, and in practice. But most importantly, we are impressed by how, under considerable pressure, they have continued to embody true leadership and inspiration. They have managed to simultaneously ensure their companies’ survival and their employees’ physical, mental, and social well-being while keeping them supported and engaged.
So, what is their secret?
We asked a few of our founders and CEOs what decision-making bases are they using and what we can learn from their strategies and experience. Although some of our founders witnessed a global crisis in the past, COVID-19 brought with it a whole new world of experiences. We found that young and experienced founders alike rely on their existing skills and personality traits, despite there being no clear roadmap for a crisis like COVID-19. What are these traits and skills? Could it be that the Israeli mentality creates an unprecedented advantage during a crisis?
We asked them 3 questions:
- What 3 core business objectives are you focusing on to help lead your startup through the pandemic?
- Can you share 1–2 values/anecdotes on how you are navigating the COVID-19 crisis?
- What gives you hope and optimism?
What 3 core business objectives are you taking to help lead your startup through the pandemic?
Gil Friedrich — Founder & CEO at Avanan says: The pandemic allowed us to press the reset button on many of the things we were doing out of habit, and analyze much more critically our spending. ARR growth so far exceeds our pre-COVID plans for 2020, with lower CAC and better margins. So, in all, the COVID crisis helped us focus and mature. This reset gave us an opportunity to build a much stronger company in the long run.
Ariel Assaraf Founder & CEO at Coralogix continues and says: It is important to keep your employees motivated and aligned with your company culture, even in tough times and when engaging in remote work. Be helpful to your customers who are in industries suffering from COVID-19. Plan your budget and make sure that whatever happens in the market, you will still be able to grow and fill the needs of your clients.
Ben Volkow– Founder & CEO at Otonomo talks about three key factors: Stability, focus, and cash. An organization needs focus, employees need to know the impact of COVID, customers need to know how the business is being impacted, and you need to have a long term plan. Regarding focus — it is time to do fewer things and focus on boosting the results of the activities you do engage in. And last, remember that cash is king. Reduce your costs, build a plan to generate more $, and strategize to fundraise.
Eran Vanounou– CEO at Varada says it is about the productivity of people and resources but also discusses dealing with change, which, of course, is easier said than done:
The Working-From-Home (WFH) phenomenon has its own advantages and challenges. We’ve set up a new routine, combining remote work and a physical presence at the office. We paid special attention to new joiners and young team members who needed more F2F/ close collaboration. Our VP R&D created a regular schedule for ongoing slack/zoom sync ups and identified when office presence was required. These days, funding is also of the essence. We invested major attention and efforts into securing sufficient funding, which resulted in a $12M Series A round. This fresh round of funding has enabled us to take the company to the next level, despite the uncertainty in the market.
Dealing with change — this is obviously easier to say than do. We adjusted our growth plan and made sure we have enough funding to deal with uncertainty. We shifted more budget to content, based on the assumption that while the business is slow, many people at home have more time to read content, educate themselves, and learn about new technology. The goal is that once business is back to “normal,” our offering will be known by our target audience (i.e. data engineering teams) and initial engagement will be in process. We also went in a bold direction with our product, focusing on cost and ease-of-use, under the assumption that when business is back — cost-saving and a smooth integration will make a big difference.
Can you share 1–2 values/anecdotes on how you navigate through the COVID-19 crisis?
Arik from Urbanleap says: If you make adaptations — do so once. A good example of this is cutting salaries/letting go of employees. Yes, it is painful, but by doing this only once it provides security and boosts loyalty within the remaining team members. Transparency is key. Always remember your employees’ mindset. As a CEO, you always have more certainty about the company, your products, and funding than the employee. This can lead them to feel very uncertain and worried. All the more so, in light of the new remote working normal that prevents employees and employers from seeing each other physically.
Company culture — Continue to do the “little things” for the employees. We appointed a “Chief Happiness Officer” who organizes virtual happy hours and gifts for the employees working from home.
Ben says: Communicate much more than before — companies tend to lose their “glue” working remotely. People tend to get off-board, so it is important to have many (even short) discussions to catch up and keep everyone focused.
Gil says: Our key mantra was that we’re in this together and will survive it together. We were very transparent with employees on cash flow to provide assurance on our stability but also explain why we needed to be more cash-sensitive in some areas. Our second mantra was that we’re here to do good: we discussed openly with our customers and our team where their challenges were and did all we could to help out.
Ariel continues and talks about the customers: Understanding challenges fast but thoroughly thinking before making any changes is key. We’re rethinking our models in light of the pandemic, what do customers want now? How do we engage with customers differently?
What gives you hope and optimism?
They all talk about one thing — the opportunity!
Gil says: Every crisis is also an opportunity. Our customers are also suffering from new challenges. If we can help them, then we can become more relevant. Our competitors suffer from new challenges as well, but if we adapt faster and respond better, we will grow faster and improve our position in the market.
Ariel looks at the online opportunity: You need to see how fast the market adjusted itself to remote work and the absence of face to face meetings. It seems like the online revolution has taken 3–5 years to leap forward.
Ben continues and says: Any challenge is an opportunity. Many will not make it through the crisis, but those that do will emerge stronger, more mature, and better positioned within a better market with stronger needs and with less competition
Arik: We know that in the end, every crisis passes, and we believe that we will come out stronger from this. Fortunately, we raised enough funds that will help us move past the crisis. As a CEO I am optimistic both about the company and the product. As we provide software technology to local governments we definitely see that they are constantly looking for new technologies to help their cities get through this in the best possible way. Another important point as an Israeli that lives in the US and manages US employees: you need to look at things differently. Yes, in Israel we have been through a few things that may have made us tougher, but the US culture is different and you need to understand your employee’s worries and fear and help them through this.
To summarize, the founders/CEOs in all sectors need to think using a scenario-based approach to plan for the present and the future. Consider different company scenarios and see how to best leverage assets that are (a) most certain, and (b) can bring value to the company and employees.
When we look at a leader, they all share a set of positive traits. We have recognized that the successful entrepreneurs are those able to stay visionary at tough times, and constantly focus on the glass-half-full.
I always like to end our blogs on a positive note. Although the future remains with great uncertainty, remember that with every crisis comes an opportunity. I believe that with proper leadership, strong vision, definitive actions, and transparent collaboration, companies will come out of this crisis stronger and more relevant in the future of their markets.
