Crisis in a startup: Crisis and startup – they both sound like synonyms. With such spectacular uncertainty on a daily basis, startups can easily be a source of pressure and stress if we don’t treat them effectively. However, in the recent wake of calamity and harsh challenges in the global economy, we can only say that there are some clever startups that have used this opportunity very well to nurture and grow.
This article is a brief introduction to looking at the crisis in a startup as an opportunity to grow. In a startup, any outcome is an opportunity and the biggest strength is in finding opportunities to be agile and change as per demand. One of the most common reasons startups fail is because of the failure to adapt and change.
A crisis is a terrible thing to waste.
Paul Romer
Crisis in a startup
This sounds a bit timely for where we are: A crisis amidst COVID19. The situation has been an unexpected one. Like every recession, this too has hit everyone with a surprise and this time the effect has not just been loss of revenue, but also far reaching.
This post however focuses on the business impact, situations of crisis in a startup and the need for constant innovation for businesses to thrive.
This discussion will not pretend to know the answers for the many challenges each of us are facing. It will however try and ask questions or push ourselves into areas which might not have been a natural choice of thought.
Today’s quote for that very reason is about the crisis and to think through what we can do.
1. The Immediate Impact of Crisis
This is probably true with any crisis in a startup. The moment a crisis hits, we all need to think of the immediate impact and how far reaching it can get. We have all read the news about furlough and the probable loss of jobs.
Most articles out there are talking about an impending recession which seems to be staring at us right in the eye. Many businesses have lost their source of revenue, customers and some even employees.
The difficulty with any immediate decision is its impact in the long run. With businesses and startups trying to go through their survival mode in the time of crisis, they are also forced to think of what the future holds.
2. Long Term Impact – crisis in a startup
Although all of us are desperately hoping and waiting for the pandemic to stop and provide a fighting chance, the end of the curve does bring a few challenges of its own.
Most businesses have gone through their first quarter and encountered a significant loss compared to their projections. Although all of them would try to push towards aggressive marketing and increased revenues, the buying capacity naturally will reduce with unemployment projections expected to increase.
Reduced buying power naturally means reduced expenses which is a vicious cycle in its own and quite frankly scary if an intervention is not done. Unfortunately, all these indicate the increasing strength of crisis in a startup.
3. Where is the opportunity?
This is perhaps the million dollar question each one of us is asking ourselves. If a crisis is a terrible waste of opportunity, where is the opportunity here?
I can see so many people out there asking this question – both internally and externally – what does it mean? How can we use this?
Most of the sensible motivational posts I have read out there ask us to look for an opportunity, a chance which can make things better. I can appreciate that the moment a crisis in a startup hits us, it is very difficult to look at the positive.
Perhaps that is the very reason why people say that you can only connect the dots backward. The way I see it, we have a situation in front of us. It is unprecedented and awful. But we cannot afford to sit back and play the victim.
4. The Harsh Truth
I might sound harsh, but I do so knowing fully that we can either fight or fall. The latter is not an option which provides us a workable solution.
We all know where the endpoint is and maybe for all we know, there might be an opportunity out there. We have to constantly keep pushing to find the outcome that suits us. It won’t lead us to an immediate solution, but maybe – just maybe into a path from which we can build.
After all, it is back to the spirit and for all we know:
A crisis is a terrible thing to waste.
Paul Romer
