The World Needs Startups During the COVID-19 Crisis
Dear Startup Founders,
You are in unchartered waters. While you have been working diligently on growing your startup, COVID-19 has turned from an event that was seemingly 10,000 miles away just a few months ago to a situation with enormous global impact that is changing the course of history. There have been many economic downturns over the years, but never quite like the one you are now facing. More than half the country is facing a stop work order, your employees are all working remotely and you are dispersed around the city, the country or even the world. It’s time to look in the mirror, with resilience and recognition: now is your time to shine.
- Take Advantage of Your Advantage
Startups have an innate ability to recognize opportunities and pivot to more necessary and imminent needs. We have seen a number of startups adapt their platforms to deal with the current challenges of the new world. Biotech startups are pivoting to sequencing, vaccine development, and treatment research. Communication and gaming startups are leveraging their platforms to help companies collaborate and work from home. Japanese students held a graduation inside Minecraft after their school canceled the in-person graduation ceremony. Health tech platforms such as Figure 1 have launched parallel sites for HCPs to collaborate and learn from each other. Infrastructure and proptech companies are leveraging their platforms to find opportunities to assist overflowing clinics and hospitals. Auto manufacturers are retooling to produce medical supplies, craft breweries and distilleries are pivoting to manufacture sanitizer, the possibilities are endless. Remember, some of the biggest startups in the world were founded during an economic downturn – Airbnb in 2008, Uber in 2009 and Stripe in 2010. Whatever business you are in, this is the time to look for opportunities within the challenges.
- Rely on your advisors
Your VCs, your mentors, your professional services firms are here to help. This is the time to lean on your advisors. While it is true that none of your advisors have gone through a pandemic of this magnitude before, they will have insights into business impacts of an economic downturn. Moreover, many of them will have lived through global recessions and will be able to identify the opportunities that exist for your business. Ask them about their experiences and the impacts of SARS in 2003 or H1N1 in 2009. They will have learned some valuable lessons. Leverage their collective resources and networks to capitalize on new market trends and needs. It’s times like these where firms like McCarthy Tétrault can broadly support startups because we have a strong infrastructure in place. We have legal and non-legal teams that deeply understand startups and the markets and have put in place a COVID-19 advisory group and an information hub to deal with all aspects of our clients’ business.
- Communicate with your investors
It’s important to remain connected to your investors. Although it is not a requirement for private companies to keep their shareholders apprised of the day-to-day business operations and startup investors can’t easily pull their investments, this is the time to reach out to your investors. You want to keep your investors well informed and assure them that you are still active. Share your plans on how you are addressing the new realities. Investors want to know that you are putting their money to work and that you are not resting on your laurels. Write to your investors, demonstrate purpose and leadership and assure them that you are pushing the business forward.
- Communicate with your people
While communicating with your investors is important, it is even more important to communicate with your employees. Your people are your most valuable asset. They drive your business forward and without them, there is no business. Remind them that their health and safety is your top priority. You should do everything in your control to keep them healthy in light of the situation. Tap into their ideas on how you can address the opportunities and challenges before you and celebrate their creativity.
- Connect with your stakeholders
It’s important to keep an open dialogue with your customers and supply chain to inform them of the measures that you are taking to protect your employees, your business and your customers and how you are adapting to the constantly-evolving situation. Your customers and supply chain may be facing similar or more challenging times as they adapt to the new normal and you may have to be patient with them. If you can recognize ways to improve their service delivery with innovative ideas, you may be able to create more significant partnerships. Think outside the box where you can and you may find yourself alleviating the stress for those suppliers and customers who don’t adapt to the change well.
This is a day of reckoning for businesses that are stodgy and traditional and cannot pivot to a work from home culture. Those businesses and specifically startups that are accustomed to change and can be flexible will continue to thrive in the new normal. The world needs the resilience and agility of startups now more than ever before. We need your big ideas and innovation. We are here to support you, connect you and advise you through your journey.
Stay Healthy and Safe,
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