How Survival Mode Looks Like Inside A Startup

When life gives you lemons, make lemonade. I used to roll my eyes at this expression, thinking how cliché it sounds. But with the Covid-19 outbreak and the MCO lockdown this year, I found myself going back to the basics and thinking harder about how to literally squeeze the best out of the situation for AdEasy. 

As you all know, we're a relatively young startup with three years on the market. Our general mindset is to work lean and work hard: keep costs low and grow, grow, grow. In normal times, most startups graduate from "survival" mode to "growth" mode after finally building up a viable product and securing the funding necessary to expand their business. But these aren't normal times. Many young companies who believed they were finally in "growth" mode are unfortunately back again to "survival" mode. To not make this U-turn in strategy is to not face the facts. 

But "survival" mode comes with a lot of opportunities. It's not all doom and gloom. If anything, it teaches you what you and your company are truly capable of. And if you survive – and I hope you do – you'll come out of the crisis stronger and ready to face even more challenges down the road. Here's how "survival" mode looks like inside a startup:

1. You'll find out what really matters to your bottom-line 

To survive a crisis, you have to be realistic about your cash-flow situation. We realised very quickly that we couldn't commit to new future expenses, because our future cash-flow was suddenly insecure. We learnt through personal experience that focusing on reducing burn rate, instead of on profit making is the key to staying alive. We drew up a set of calculations to figure out our burn rate and identified ways to cut gratuitous expenses and reduce variable costs. We started saving more than investing. We identified new available cash or credit lines that will help us cover operational costs and even allow for some marketing. We ended up giving up our own salaries, office upgrades, family holiday plans, the company bonus – just to keep things going. 

2. You'll try things you had never dreamed of trying 

You'll try to generate cash-flow in ways that were not even on the agenda at the beginning of the year.  On our side, we've started to mitigate risks by diversifying our business, product, and funds. We added products to our offering that a few years ago we never imagined we would add, simply because it wasn't part of our value proposition, because it didn't fit the brand message, etc. We came up with promotional offers such as the Recovery Promo that in normal times don't make much sense, because it cuts so much into revenue. I've even heard of some businesses offering their services at cost price, just so that operational costs can break even. When I heard this, I nodded in understanding, because this is what it takes to survive. 

3. You'll start to spend more time helping (instead of selling to) customers 

Instead of upselling users, we've started to focus on helping them. In a crisis, upselling feels cheap. Instead, we're trying to focus on explaining how our business and product can help solve customers’ problems during this crisis. For example, we're exploring new ways to make transactions easier for customers. This includes new channels of communication – WhatsApp, Facebook, appointment forms, anything – so anyone can easily reach out to us for queries and support. We also partnered up with like-minded businesses and are encouraging everyone to support local SMEs – together. We're discovering a new voice (kinder, more caring, less audacious), a new way of communicating, that makes our brand sound warmer and more human to our customers. We're saying it so often that we've started to believe it: even though times are tough, we'll all get through it together. 

4. You'll end up advertising less, but smarter 

Many businesses start to advise you to cut your advertising budget during the crisis. Probably, like us, you'll realise that it might not be a good idea as a young business to cut down on advertising completely. Less advertising will mean less people will hear about you during the crisis, and your business will be quickly forgotten. What we want to do is help customers advertise better, smarter. With us, you'll get to compare and study media offers and find the best bang for your buck. You'll target the locations that really matter. The target group that will need your service the most. And we hope we can help you deliver on your 2020 business objectives. 

5. You'll find out who you can really count on 

We're constantly realising just how lucky we are to have great team members. Very often during Covid-19, I find myself wondering how any business can survive without this level of trust and motivation. When times get tough, most businesses try to lower their overhead by "letting people go", but I'm skeptical about this approach. Your team is there to make things happen. They become your silver bullet, your family, your champions. They worry as much as you do and they follow the business numbers with as much glee or disappointment as you do. I've realised over many years that this is dedication you simply cannot buy – people who believe in you, your business, and in giving 200%. The ones that stick around and deliver become your no. 1 most valuable asset.