How do other startup CEOs cope with the crisis.

How do other startup CEOs cope with the crisis.

March 23, 2020
March 23, 2020

In the past three weeks I’ve spoken with more than 30 startups CEOs’. We’ve discussed their plans to front the crisis. (20 companies are VC backed, seed / A round, the other 10 are bootstrapped)

Not a single one took the implications of the crisis lightly,both bootstrapped and VC backed startups realized that this is not a one-off event but rather a beginning of six to nine month stretch.

So there’s quite a lot of variances and some companies choose a few courses of actions:

1.      Focus on enhancing the product and R&D capabilities while improving the customer service for the existing install base - Some CEOs wrote 2020 off and said that as they don’t expect any healthy buying sentiment in EMEA and the US before Q1 2021.

2.      Adopt a different sales operations model – A few CEOs that mentioned their product’s sales requires a f2f interaction started preparing for more inside sales based sales operations, others redraw from the direct approach and started looking for the right partners and channels to partner with.

3.      Reduce HR cost, freeze executive recruits, minimize spent – as opposed to the surveys conducted by heads of HR,the CEOs indicated cutting back between 15% to 50% percent of the company’s FTEs,when asked about which departments will suffer the biggest cuts I couldn’t find a common denominator, some started with the product / R&D, some spoke about sales and BD cuts.

The bootstrapped companies were more prone to “hibernating” until the dust settles and where relatively better equipped to handle this “unknown” terrain.

4.      Define a “new” thin business offering which is pinpointed, cheaper and quicker that can be a “foot in the door”, generate leads and take the new offering to market. Trying to turn the challenge into an opportunity.

5.      Stay on course, optimize revenues from the existing customers, monetize on the existing pipeline andseed leads to generate adequate pipeline for the day after, 20% of the companies spoke about increasing marketing investment.

3 out of the 30 already planned to close the shop if by end of April they won’t be able to raise funds or generate new deals.

The “unpaid leave” allows the CEOs with some relief in postponing the decisions regarding layoffs, the fear mentioned is around what happens the “day after” the confinement ends in Israel and the EMEA and US market are late to pick up .. So sadly not much optimistic forecasts for the next six month.

 

In the past three weeks I’ve spoken with more than 30 startups CEOs’. We’ve discussed their plans to front the crisis. (20 companies are VC backed, seed / A round, the other 10 are bootstrapped)

Not a single one took the implications of the crisis lightly,both bootstrapped and VC backed startups realized that this is not a one-off event but rather a beginning of six to nine month stretch.

So there’s quite a lot of variances and some companies choose a few courses of actions:

1.      Focus on enhancing the product and R&D capabilities while improving the customer service for the existing install base - Some CEOs wrote 2020 off and said that as they don’t expect any healthy buying sentiment in EMEA and the US before Q1 2021.

2.      Adopt a different sales operations model – A few CEOs that mentioned their product’s sales requires a f2f interaction started preparing for more inside sales based sales operations, others redraw from the direct approach and started looking for the right partners and channels to partner with.

3.      Reduce HR cost, freeze executive recruits, minimize spent – as opposed to the surveys conducted by heads of HR,the CEOs indicated cutting back between 15% to 50% percent of the company’s FTEs,when asked about which departments will suffer the biggest cuts I couldn’t find a common denominator, some started with the product / R&D, some spoke about sales and BD cuts.

The bootstrapped companies were more prone to “hibernating” until the dust settles and where relatively better equipped to handle this “unknown” terrain.

4.      Define a “new” thin business offering which is pinpointed, cheaper and quicker that can be a “foot in the door”, generate leads and take the new offering to market. Trying to turn the challenge into an opportunity.

5.      Stay on course, optimize revenues from the existing customers, monetize on the existing pipeline andseed leads to generate adequate pipeline for the day after, 20% of the companies spoke about increasing marketing investment.

3 out of the 30 already planned to close the shop if by end of April they won’t be able to raise funds or generate new deals.

The “unpaid leave” allows the CEOs with some relief in postponing the decisions regarding layoffs, the fear mentioned is around what happens the “day after” the confinement ends in Israel and the EMEA and US market are late to pick up .. So sadly not much optimistic forecasts for the next six month.

 

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