Hi Founders and Fellow VC Friends,
This week’s Awesome Person asked me to respectfully hold their post due to the coronavirus. Have no fear, we’re still here to help and hopefully make your day a little better 😀. Here’s what’s on the docket:
A pump-up speech
How to survive the COVID19 downturn
Here to help
A pump-up speech 😍
Remember that lots of great companies, like Airbnb, Apple, and Mircosoft were started during hard times. Hard times build great companies. We’re playing the long game. You got this.
A lot of people are committed to your success. We want to see you and help you win. Please don’t be afraid to reach out to your teammates, collaborators, and VCs for help. Your network can help with tactical (e.g. debt financing) and emotional (e.g. staying calm) stuff.
At the risk of sounding too woo-woo, now may be a good time to take up a gratitude practice, meditation, or any ritual that brings you peace and happiness. It’s statistically likely to improve your well-being and business. Pro-tip: Binge eating peanut butter with a spoon is not the answer, dance parties on the other hand…😂
Surviving the COVID19 downturn 🙏
Time to spring into action - let’s beat this thing (both the virus and the economic impact)! Here are some things to consider.
Get more cash in the bank
A couple of the Awesome People Ventures portfolio companies have secured $1M-$3M+ in venture debt and lines of credit. This capital has varying interest rates and terms. You don’t need to use it and it can be a Plan B. Your lead investor can help you think this through. Other companies are re-opening their rounds or raising more than they currently need.
3 strategic shifts worth considering
Sell upmarket - Enterprise sales gets a bad rap for long sales cycles. That said, if your product can solve big companies’ problems, it’s worth considering going upmarket since larger companies have more $$$. If your product isn’t quite there, you may be able to cover short-term product gaps with lower-cost talent.
Distribution or retail partnerships - You’ll likely have less cash for marketing, so it’s time to get creative! How can you get your product in front of new audiences? Can you form partnerships (online and offline) to reach more customers? Can you build more growth and retention loops into your product?
New products or positioning to address today’s market - Yesterday, GEM ran an Instagram poll asking their customers if they wanted a half-baked version of their immunity product (lots of zinc and vitamin C). The answer was obviously yes. Take a moment to re-evaluate your company’s roadmap. Do you need to shift your products and positioning? Reallocate resources to do fewer things better?
5 ways to save $15k/mo without changing your business
These are courtesy of Josh Browder, a seed-stage founder backed by a16z and Founders Fund. I rounded up his twitter tips and comments below.
Get rid of physical corporate credit cards, virtual cards only. This shift in psychology results in savings of $10k+/year.
Cut AWS spend. They’ll give you $100k free. If that runs dry, and times get hard, apply for Google’s Cloud Platform, they’ll give you another $100k free and port you over.
Apply IRS R&D Tax credit against employee taxes. Here’s a calculator to see your savings. Talk to your accountant about this.
Negotiate to pay your lease on your credit card with no extra fees. Many companies do this and get thousands in cashback every year. Side note: potentially consider going remote and cutting office spend entirely.
Negotiate the price on every SaaS tool you use, even if it’s self-serve. Aim for 80% of the publicly listed startup price.
Additional reading: Pear VC put together a super-comprehensive guide to weathering the storm. If you’re trying to understand the economic impact, David Ulevitch at a16z tweeted out this sobering read by Gavin Baker. TL;DR profitability is the safest way out.
An offer ❤️
For most startups, headcount is the #1 cost. We’re all going to feel this. If you don’t need a full-time person, and could use a freelancer, consultant, or interim head of X, let me know. I’m here to help.
When in doubt, revisit the pump-up speech above.
Stay safe, call your loved ones, take good care of yourself and…. stay awesome,
Founder of Awesome People List (subscribe here)
Founder of Awesome People Ventures
PS. Housekeeping 🙄 - If this is going to other or spam, please add me to your contacts list.
PPS. Because you’re still reading this, sending you lots of ❤️.