10x Harder
In Life and Startups
Photo by delfi de la Rua on Unsplash
I have been struck by how many stages of grief my friends and I have been going through. I move from, shock and denial (usually when I’m watching the news), to anger, to bargaining and then to fleeting moments of acceptance and gratitude. The normal things in life are hard, but with the current climate of uncertainty, the “normal” just got 10x harder. Even something as simple as getting groceries requires a large amount of planning and disinfecting. Or the more universal tragedy of losing a loved one is very difficult. Now, imagine not being able to comfort, hug or mourn together. This is what we as humans around the world are being asked to do. This requires superhuman strength.
In many ways that is what a crisis does. It creates urgency, uncertainty and calls upon the extraordinary inside of us to rise to the occasion. And sometimes, that extraordinary in life calls you to do nothing and stay at home.
But what if you are a founder? You’ve already been running the marathon of a startup at a sprinter’s pace. Now, you have been asked to do more in ways you have never been called upon. The reality is that you are not alone. Everyone is being called to do this.
A founder contacted me and said moving to remote work had caused employees to work slower, but I told him that perhaps it’s not the move to remote work; everyone is moving more slowly because of the pandemic.
All the changes are happening at once, and in a pandemic it is rarely you or your employees that is the problem. But, unfortunately you are stuck with fixing this problem for your company. By now I’m sure there are decisions being made like work from home. But now and in the coming weeks or months you may be faced with a set of decisions you are trying to avoid.
Plans change, and the only constant is change particularly in a crisis that is unknown.
Plans
Focus
Focus on getting to profitability or cash flow positive. The focus will cause you to say no to things and cut discretionary activities. The CEO of Box is cutting side projects , Airbnb is cutting marketing and executive pay, and many have had to do layoffs. All of these companies are making cuts to focus. For most companies in this pandemic, the singular focus is to survive. The best way to survive is to protect your cash flows as long as possible.
Costs and burn are 100% in your control.
Scenario planning
This should be happening constantly. You should know if you are default dead or are default alive given different scenarios. And know this like the back of your hand. What happens if you pull marketing costs to $0? What happens if revenue drops to $0? [a] Do you have enough cash to extend 18 - 24 months? This may seem drastic, but it is better to have your customers fund you rather than have your future in the hands of investors.
In a crisis, surviving is thriving
Bias towards action
Once you have done your scenario planning, you choose a scenario and execute. The bad news is you should choose the worst case scenario for your company to survive this time. The good news is that startups favor action. You have been practicing speed all along. Now you need to go warp speed at the highest incline. This also means your leadership style and cadence may need to change to match the sense of urgency you want your startup to take. So much will be happening that a multi-phase plan will likely be executed in parallel versus sequentially.
Urgency, like laziness, is the mother of all invention
Plan for Opportunity
While many are on the road to cutting side projects to survive, the CEO of Atlassian is moving more dollars into R&D because of the higher ROI they think they will get versus investing in sales. They are making the bet that the short-term revenue from sales will dwindle quickly and they’ll need to make up for it. Once you make and communicate the changes, you need to focus the business on opportunity. Now with a more focused and nimble team, you can grab opportunities.
During the 2008 Financial Crisis, we were a small team of 30. Our investors bailed on us and a $3 million dollar ad revenue contract disappeared. We communicated this news to the team, and enacted the pay cuts and asked for voluntary pay cuts. We talked about how we needed to move the company forward. We chose to pivot into something that would not be dependent upon ads. We followed a framework that looked at markets (what did people want?), our core competencies (what were we good at?) and our passion points (what were things that excited us?). At the time, there was a gaming company that was doing really well called Zynga making casual games such as Farmville and Cityville. We had almost 100 years of combined experience in building Facebook apps. We knew how to build Facebook apps. On top of that we had a passion for making games, particularly our CEO for a different type of game play that did not exist on Facebook. We took a risk and decided to build a game on Facebook that had a deeper game play targeting people who already played video games - “gamers”. What was great about this pivot was that instead of focusing on three different stakeholders (the company, the users, and the ad sponsors) in our previous ad supported business, we were able to focus on just one: the player. That was exciting. We decided to choose an IP that was in the public domain because it was recognizable and did not cost us money. We put two of our engineers on building it. We hired art students to intern, used our existing friends and family for user testing, and marketed to our communities and (ad supported) businesses. Ultimately, we launched what would be our first $100M game - Kingdoms of Camelot.
“On a quest, you have to use what you’ve got.” -- Onward, Barley Lightfoot
Communicate
What should you tell your employees? How should you communicate?
Lead with empathy and compassion, including yourself
This is unprecedented. I was looking at a playbook that I wrote about layoffs a few months ago, and the tone is completely off in these times. (I will send out when updated.) Know that everyone’s life has been upended, and the most important thing you can do is lend compassion. Take a beat and offer yourself some compassion, even something as small as acknowledging this to yourself that this is hard - 10x hard, so you can better care for your team.
It’s hard to pour from your cup, when your cup is empty.
Keep messaging driving to the key metrics at hand
Just like everyday the news reports two numbers: # of COVID cases and # of deaths. There is nothing more sobering than numbers. If there are metrics, which I’m sure is revenue and burn, talk about them every day to everyone.
There is nothing more sobering than numbers.
Increase communication cadence
Have a regular cadence for communication. Many teams turn to having a daily morning meeting with the exec team, an all-company email (depending on the size of your company), and the end-day meeting with their exec team. All actions should be anchored around the metrics. And don’t be surprised if you begin to micro-manage and measure to these numbers. Just like in weight loss, tracking is the number one habit that leads to progress.
Create new cultural rituals
People have done things from starting a food slack channel to Zoom Happy Hours to Fancy Fridays to virtual planking.
For us, we had to cut lunches (they add up) for a team of 30. We decided to begin our own tradition of potlucks on Friday and soon cooking competitions that became something fierce. Many people on the team were fans of McDonald’s chicken nuggets, so Friday nights were nuggets and board games - particularly Settlers of Catan. We enjoyed this time together so much that our next Christmas party was in the office playing board games.
Currently all the cultural rituals need to be virtual unfortunately, but that also means you need to be more intentional about them.
10x harder does not necessarily mean doing the same thing with 10x intensity, but doing things differently. And may you live to fight another day.
✍️Sign up for this newsletter if you have not had the chance, I promise to be kind to your inbox 😊
📣Share this post with a friend
Bonus: 🎵This song has been proven to have a 65% reduction in anxiety 😬 and a 35% reduction of physiological resting rate. 😊Close your eyes and imagine your happy place - which is likely a few weeks ago.