Uncertainty might be a rule of thumb for start-up game; nonetheless, when economic turmoil and ongoing war threatens to shake the financial stability to its core, the entrepreneurial journey might feel like “living in a pressure cooker.”
Creating a new venture during economic uncertainty is not for everybody. Yet, during every crisis lies a great opportunity.
Here is how to stay afloat during uncertain times:
- Sit tight and breathe: If you are preparing to create a new venture during an economic turmoil, political crisis, war, or other uncertainties, accepting that things will be rough could help you stay sane. Even if you are doing fine, your technical partner might experience issues reflected in your product, or your peers might go bankrupt. Accepting the potential hurdles and staying realistic would decrease the shock factor and help you quickly reach the solutions or the pivot decision. Remember, change is not bad; it is a way to grow!
- Become a part of your customers' lives: When designing your venture, focus on becoming a part of your customers' lives instead of creating short-term gains. The service or the products might be helpful during the crisis, but what about afterward? Will they still be needed? What does the big picture look like, and what does the market need?
- Focus on "focus": Although "MVP" is considered a hipster buzzword, it actually represents the core start-up mentality. Keep it simple, period. The first two to five years are the most dangerous in a start-up lifecycle as founders get distracted with too many new and shiny experiences. Therefore, focusing on "focus" will be the essence of staying afloat, especially when you have so much uncertainty around you.
- Do it once and do it well: Instead of dwelling on areas that you are not an expert on and trying to figure out topics like market and competitor research, business plan, regulatory models, pitch decks, new markets, and product roadmaps, outsource from experts who can create better results more quickly. Remember, these answers will be crucial to your strategy and roadmap. So getting some answers quicker will benefit you more in the long run than saving bucks.
- Create a support model that works for you: You do not have to start hiring unless you need to. Instead of hiring and firing or wasting energy on long recruitment processes, or hefty fees, hire freelancers, interim managers, and consultants who know what they are doing, who can start fast and get you where you need to go quickly. Recruitment efforts, duration, and costs are usually underestimated and can create significant opportunity costs if started too early.
- Keep an eye on Plan B: Do not forget to include a worst-case scenario outlining your risk mitigation strategies in the investor or partner due diligence folder for extra credibility and preparedness. During uncertainty, investors and institutional partners would be interested in seeing your belt-tightening efforts and potential emergency scenarios. Such situations might include funding being slower than usual, one of your partners going bankrupt, your interim CTO catching monkeypox, losing your biggest customer, or encountering some other force majeure.
- Become a part of a network: Becoming a part of an entrepreneur network will help you compare experiences and get support during tough times. In addition, you can barter skills and exchange experiences to gain valuable insights and shortcut answers. Quid pro quo!
Something for the road: This will be a tough ride, but remember that most creative businesses that still inspire the start-up industry were planted or created during the 2008 crisis, so there is no reason you cannot be a part of this period's success stories. Stay realistic, prepared, and transparent, and you will get there