You Are Here, for Such a Time as This
April 9, 2020
By: Dennis Ensing, Executive Director, Equation – SWO Angels
In the depths of your personal and business participation in our current pandemic crisis have you stepped back and asked how you can make the most of a moment like this? I believe that especially critically for tech venture founders, this is such an important and unique moment. The thoughts in this article were motivated by a podcast I listened to recently with James Cham, a venture capital investor with Bloomberg Beta, together with some excellent reading from McKinsey & Company, referenced below. Oh – and also very much by a couple of amazing founders I work with who presented me with their examples of bold and inspired pivots.
Together, these prompted me, in turn, to present you with this challenge – are you going to get past freaking out and trying to figure out what to do day to day? All the rules have been broken and thrown out. Suddenly you can create something different and redefine things. There is an incredible openness right now that is unique.
Of course, we don’t know where we are going to land economically in the coming months, but the cone of possibility - the range of what's possible – is very wide, which is both terrifying and exciting. This is “such a time” for the creativity and drive of our entrepreneurs. Even while you grapple with the toughest decisions of your careers – in the midst of layoffs and extending your runway – you can dream. For example, Cham says:
“There’s also this chance . . . [CEOs] can say to themselves that actually their [company’s] relationship with customers or partners could be fundamentally different because they might be in a position to serve them differently or better and open to new opportunities.”
As I said, this way of thinking is hard to do when you are also juggling how to renegotiate the lease. But for the best entrepreneurs that I know, they are thinking that way right now. They are keeping their eyes open and not using their old rules of thumb. They know deep in their souls that the whole set of pat answers that they and their investors held for things no longer apply.
Cham went further:
“I think that there are a whole bunch of products that were hard to sell in the past because they would require too much wrenching change inside an organization. And if we are indeed looking sort of at a prolonged downturn, then I think there's a perverse way in which willingness to change is totally different. And so the willingness to adopt new technologies can be different than it has been for the last 10 years.”
These days, that's both the fun and the terror of the CEO’s job. When you are already distracted and worried about your kids or your parents, the decisions you make in the business are going to be set down for a long time. So, take time out from the chaos to focus on the things that are most important and should actually influence those decisions.
Which leads to my examples from two amazing founders, but with details removed and names changed to protect their identities.
Sophie called me late last week: “I need to run something by you!”
Sophie’s core product is an enterprise B2B application. The revenue model is SaaS-based, but their new sales fell off a cliff in March. They retained as much of their team as they could to “do something good”, but still needed to lay off one-third and cut back hours of the rest to ensure sustainability.
We scheduled a Zoom call the next day. In our call she showed me a slide deck that outlined the pivot of their software to address COVID-19 and demonstrated the smartphone app that would be in beta in just a few days. Think of it as a Trusted Traveller program enabling automated risk screening and tracing for individuals and businesses. The software is similar in principle to the “health pass” applications being deployed in China in an attempt to mediate the return to socialization and commerce. However, unlike these highly invasive systems, their mobile app has privacy at its heart while still enabling AI-based clustering. Their app also differs in that it uses behavioural modelling rather than private health data to screen people.
Of course, Sophie also asked for help – assistance developing communications around this product and introductions to accelerate a local decision to support a pilot. They are seeking funding from the new Strategic Innovation Fund COVID stream for the testing and rollout.
Steve’s email on Friday began like this:
“Hi Dennis and Paige,
I hope you and your families are all safe.
You and the team have already done a lot to help us. There is another thing that we could really use your help on.
Many companies are looking for government sources of funding to help them. We will look into these too, but we'd prefer to do something different if we can. We'd rather be even more entrepreneurial than before -- we're using this crisis to push ourselves harder to take on unique business partnerships that we normally would have thought about later.”
He then went on to talk about their main assets, wealth of IP, experience and ideas to participate with partners to enable ecommerce and enterprise point of sale in adjacent markets and new industries. But Steve’s pivot would be for medical companies that want help to solve the problem of how to stay in touch with their patients as a follow up over text/phone/email. He asked for our help with partner introductions.
But what you also need to know is that Steve was the first CEO in my circle of relationships who made significant structuring changes and layoffs of 30% of their headcount. He and his team are serially successful founders and (very well) VC-backed.
For both of these founder-CEOs, we have already made introductions and will continue to lean in with them to assist them in making these transformations as successful as possible. If you, as a reader of this article, have ideas or contacts for them I would be delighted to make an introduction. I would also be delighted to hear your stories of how you are making the most of this moment.