It’s clear that the current crisis is impacting businesses all over the world. It is not only small companies and entrepreneurs who are affected but even larger firms, too. However, what are good startup companies doing to ensure they pivot and survive crisis scenarios?
Assessing the Situation
Startups are in an excellent position to be able to offer insight into the world stage. After all, they are often built to address growing needs and concerns in new and innovative ways. All good startups should, of course, take a step back and not panic.
But how easy is it to avoid panicking when a series of investors or clients fall away at short notice? The best startups will be looking not only at the outer economy and markets, but also their internal machinations.
How prepared are they to tackle big, sweeping, crisis-impacted change? Will they need to make significant changes to staffing to cut overheads? Can they expect clients and investors to return in the short-term? Crucially, there is a lot of fact-finding to be done.
A Willingness to Be Ruthless
Many startups are ruthless in their approaches to innovation. Therefore, it stands to reason that they, too, may be willing to make drastic cuts to weather the storms of a crisis. For example, some startups may have to balance a drop in clientele with a cut to their staffing.
The critical thing startup managers must remember about making these pivots is that they are temporary. At least, a good startup will make such a pivot with a view to it being short-term. It may be tempting to make such a change seem or feel, semi-permanent.
Pivoting for a startup often means having to return to the drawing board. A great startup will draw up a wholly new business plan. They will discuss changes with investors and stockholders. Crucially, they will spend more time focusing on how to get out of the crisis zone in the long-term by drawing up a short-term management strategy.
Thinking Alternatively
The whole concept of pivoting revolves around making a drastic change. As mentioned, this is not a change that needs to be permanent. Some startups may switch focus altogether to pinpoint a new insight into the ‘greater good.’ What has changed in terms of vital importance for their customers?
Adapting and pivoting a startup is much like species evolution. Sudden environmental changes force us to make big changes if we have any hope of surviving. Thankfully, the flexible and fast-paced nature of a startup is likely to help it move in to pivot mode.
A good startup will have the time and elbow room to make quick changes. They won’t have to risk losing as much revenue as larger firms, and they won’t have as many investors or stockholders to renegotiate with.
What’s more, it is always possible in times of crisis that they find new investors looking for good startup companies. For example, scouting investors could use a catalog such as Fundz to find their next venture.
Ultimately, a startup should be willing and ready to adapt. It’s in their nature. Therefore, a startup that doesn’t pivot well in a crisis may not be one that adapts well to sweeping changes in the long run.
SOURCES
https://hbr.org/2020/03/a-5-day-plan-to-keep-your-company-afloat
https://www.zdnet.com/article/pivot-not-panic-how-startups-are-coping-with-the-coronavirus-crisis/
https://insight.jbs.cam.ac.uk/2020/the-corporate-pivot/
