Pay rent or pay suppliers? Cut back hours or lay off staff? Take on debt or close up shop?
For so many businesses, COVID-19 has led to a series of devil’s bargains. Circumstances have reduced our focus to what’s immediately in front of us — keeping workers safe and keeping the lights on another day.
But surviving and recovering from this crisis demands that we also think beyond just the next few months or even years.
Finding a way forward may come down to remembering — or even rediscovering — your North Star as an entrepreneur, professional or business. Why do you do this in the first place? What’s the finish line you hope to reach? And, in light of the crisis, what are the best steps to get there?
Answering these questions isn’t easy, especially right now. As an investor, I’ve been guiding many of the companies in my portfolio through exactly this kind of soul searching. Here are some steps we’ve come up with that may be helpful for other business owners out there.
Panic is natural, but history can help
In the business world, we’re seeing reflexive reactions to immediate circumstances — cutting costs, laying off employees, scaling back on any sort of investments. 16.8 million Americans lost their jobs in the last two weeks of March and the first week of April. More than a million Canadians lost their jobs in March.
In many cases, businesses can’t avoid taking these painful steps. Companies with no cash runway need to get their houses in order first. But once you’ve triaged the situation and applied for available government benefits, it’s important to stop, breathe and assess where you stand and where you want to go.
I’ve experienced this firsthand with FansUnite, a sports-betting startup that I invest in and advise. The shutdown of live sporting events around the world wiped out their revenue source. But as the dust cleared from the first few weeks, we realized that although business had imploded, we still had an strong technology platform to build on. Our story was far from over.
A sense of history can be a source of solace here. Collectively, we’ve faced catastrophes before — from World War II to the Great Recession — and always recovered. Not only that, these crises unleashed periods of soaring growth and innovation.
Research and reorient your North Star
Once you’ve figured out what you need to do to get through this week and this month, zoom out: What do you hope to achieve in five years? And — even more importantly — where will the world be in that time?
This isn’t guesswork. History is cyclical and human beings are predictable. Our fundamental needs rarely change. But how we satisfy them does change. People will always need to eat, work, play, and connect with each other. Businesses will always need ways to perform more efficiently, and to gather and process information that helps them do so.
Then, consider what new trends have been spawned or accelerated by the crisis. The impact of tech on everything from the way we work to how we shop has been supercharged during the pandemic. At the intersection of enduring needs and novel ways of fulfilling them lies business opportunity.
One critical caveat: finding that North Star, alone, isn’t enough. In challenging times, morale matters. For entrepreneurs, it’s critical to communicate your vision to team members, customers and investors.
Reverse engineer a plan to get there
But setting a long-term goal is just a fantasy if you don’t plan the steps to achieve it. What are the incremental moves to get you where you want to go? And when you hit the inevitable walls, what’s your plan B, C and D? Setting goals is great, but it’s following through, and adjusting course in the face of setbacks, that separates successful companies from the pack.
GE’s then-CEO Jack Welch famously introduced the concept of “stretch goals” to his company in the 1990s — pushing his managers to aim for ambitious targets. They reached those lofty objectives by breaking them down into a series of realistic, shorter-term SMART goals — specific, measurable, achievable, and time-bound. Step-by-step, they got it done.
For FansUnite, we put together a roadmap, starting from our end goal of building an industry-leading online betting platform and working backward. Here are the competitors we’ll need to acquire, upgrades we’ll need to introduce, and hires we’ll need to make. In the near term, here’s how we can refine the sales funnel and overall experience, so once sports come back, we can fire on all cylinders.
The end of this story has yet to be written, of course. The challenges ahead are very real and every business is positioned differently to cope. But I do believe that keeping sight of where we want to go — rather than just where we are right now — is a crucial part of getting there.