By Gil Ben-Artzy, Founding Partner, UpWest
The COVID-19 pandemic has obviously had a far reaching impact on nearly all aspects of global business. Some economies have grinded to a near halt. With work migrating to the remote/digital world, companies big and small suddenly have to find creative ways to not only maintain normal business operations, but even just to survive.
For seed and pre-seed stage startups this can be an especially challenging time, as investors are being cautious with new investments and customers are slashing budgets. So what’s an early stage founder supposed to do to gain traction? There’s been no shortage of content pieces advocating for founders to focus internally and continue building a killer product or on existing business, but at UpWest we believe that giving up on engaging with both your customers and the broader market is a mistake. Just because your target market might be hard to penetrate right now, and new funding may be hard to come by, doesn’t mean you have to play defense. In fact, it’s more important than ever to be as visible to the market as possible.
The pandemic will not earn your business a discount
Founders trying to raise capital either now or in the near future also need to be aware of how investors are assessing investment opportunities in the age of Coronavirus. This is especially true for Israeli and other founders abroad looking to break into the US market. Seed funding is quickly becoming a local business, with investors leaning on their local networks more than in the past because of the pandemic. Investors need to mitigate risk as much as they can, so they’ll be looking for connections that will vouch for companies and can provide that aforementioned social validation. Getting meetings with new investors is already tough these days, and without any boots on the ground in the US, it’s going to be even more difficult for founders.
As a founder, this means you have to be intentional about how you build your company and how you demonstrate your momentum to-date. If a seed stage company from abroad could already prove its product has taken hold in some part of the US market, then that company is even more impressive now and will stand out. Those without that pre-existing market traction face a very tough uphill battle. Investors are not likely going to give you a break and be impressed with your ability to rack up small customers in your home market.
Working your extended network matters more than ever
There is no magic bullet solution to get your startup through this new normal, but it is absolutely critical to play offense and be proactive. Startups and founders have to find a way to stand out and actively engage with potential customers and investors. Fostering a strong network that can vouch for you is essential. If you haven’t already, it’s time to build an advisory board and connect with people who are highly experienced in your industry. Think about who can add credibility — industry experts and leaders who can leverage their network and relationships for your business development.
You still need to network and meet people in your industry, future investors, and influencers who will advocate for your product and help you with vitally important intros for your business. It’s a muscle that you have to flex a lot these days and it’s a fundamental change for many to be less transactional and more intentional about the way you communicate with people. These intros might normally happen at industry events like RSA or TechCrunch Disrupt, but because everyone is working remotely, those opportunities aren’t happening anymore. Many of these events are migrating online at least through the year-end, so founders still need to plan on maximizing the little exposure they can get and make the extra effort to network and build a pipeline the best they can.
Keep your immediate network tight
Current customers are your most valuable asset. Focus on maintaining these relationships and developing a deep understanding of their needs and pain points, then do your best to serve/resolve them. If there are new, more immediate pains because of the current climate — focus on solving those even if it’s not what you’d normally focus on. Thinking about how you can provide value now. Remember, these customers are your reference and “conduit” to the next customer. You have to keep your immediate network tight and make sure you are leveraging connections to get introduced to others they know. Having social proof that your product is transferable (even in these times) is extremely important.
Don’t be afraid to hire the talent you need
If your startup has only a few early customers in your home market, you need to think really hard about the talent you hire that will help your team build for visibility and relevancy. If you’re not going to be able to win a bunch of new contracts in the US for the next few months, how can you best assure that you’re building the best team and making the right connections to be primed for when things open back up a bit?
For companies who are doing well or are even seeing growth opportunities, this might be a very good time to hire. There’s high-quality talent available out there. You should be constantly engaging with people that are already deeply rooted within your target market, who can access the market insights you need and share them with you. Nurture those relationships so that whether they already are or may become available, you have a foot in the door.
This is not a time to retreat inward, lay low, or focus solely on your product. You could have the greatest solution in the world, but if you don’t take the time now to forge connections and develop relationships with potential customers and investors that will vouch for you, it’s largely meaningless. Just because the pandemic has dramatically altered how we work, doesn’t mean you can’t continue to be active and visible to the market.