7 Days of Covid-19 as an Early Stage Founder
If any of you are unfamiliar with the lyrical genius of Craig David, please click the link and make your self-isolation a better place. (and this blog post makes sense!)
“Got the information on Mondaaaaaay”
Purely through chance, I sent my monthly investor update on Monday 9th March, on the eve of the Week of Realisation about the Coronavirus crisis. I signed off my usual SUPPORT section with a simple question:
Almost immediately, several investors responded with variations on the following;
So I paused all planned work for the day and kicked into action. I’ve never experienced any type of recession while I had an operating business. I’ve never been working, tax-paying adult through any true crisis or a world war. But the female motherly protector in me kicked into mode and on Monday afternoon, I set about information gathering.
Arrange calls with lead investors
You want to get facts from those who matter, not hearsay and Twitter hype. Your lead investors are your first customers for the next round. Find out what they want to see from your business over the next 6 months. Local Globe had already sent an email to the portfolio with a questionnaire on the state of our affairs on Fri 6th March. I found the email again and pinged it back to get a call.
I told my investors 2 things:
1 — I’m going to cut costs
2 — We are still pushing forward with our new Product Features as planned.
3 — These are the new metrics I’ll be tracking in anticipation of bookings being down.
They were reassuring and supportive.
Call other Founders and see what they think
See what my friends at Pre-Seed are thinking and Series A and B. Are they worried? And what about? Listen to all the various ways a crisis can impact you. Even if it’s not relevant for your business now, it may be in the future.
Call the Series A investors I had in the pipeline and get their feedback on the state of affairs.
Are they going to be pausing all fundraising? Again, get facts.
Look at the data/shutdown from previous countries to gauge a timeline.
How long will this likely last? Every event will have some comparative event in history where you can see financial impact and recovery, whether is was 6 months ago in Wuhan or 60 years year ago for a war.
Talk to the team, but don’t panic them
At 3 pm, it was someone’s birthday in the office. I used the cake and coffee gathering to tell the Beautystack team that things might be happening and to stay on alert re Covid-19. I explained the potential financial impact for us, not the viral one.
I then made a list of costs to cut on the tube for the school run to collect my son.
“Cut all superficial spend on Tuesdaaaay”
Reduce Burn, Extend Runway
So with my list of extraneous costs, I sat with my amazing Production Manager, Anna, and went through the last 3 months’ bank statements line by line. My scenario planning centered around the thought — “If we are unable to fundraise, how can I conserve capital to extend the oxygen to the business for a few more months”. Check all random software subscriptions, negotiate a lower server bill, ask for start-up credits from Stripe, AWS, etc, sublet part of the office for a year. Do whatever it takes.
Cancel all work not directly attached to your product.
I sent emails to anyone not working directly on the Beautystack App initiating their notice periods. Most of our freelancers, contractors, and consultants were coming to the end of the 3 months (Jan-Mar) terms anyway, but this instantly improves our cash flow. We also canceled all of our public events on Tuesday, and I canceled all my forthcoming trips abroad. 20% Burn reduction goal.
Call your Accountant
Arrange a 2-hour working session with your Accountant to update your cash flow forecast for the next 18 months. Share with your investors so they know you’re taking things seriously out here!
“Talk to your users on Wednesdaaaay”
As each day wore on, the news cycle started to get people more and more concerned. I thought it was time to communicate to our Users what was going on. We have an incredibly small early user group and I’m on first-name terms with our Bookable Beauty Pros. If you’re a Founder who has created a stream of income for your users, now is the time to show them that your Mission Statement is not a bumper sticker.
What will your users be worried about?
As a marketplace, we prioritize our Sellers, that’s our Beauty Pros, on helping them be economically independent. I realized they’d be worried about 3 things:
1 — Getting infected from Clients
2 — Loss of income from clients canceling.
3 — Loss of income from getting sick and being unable to work.
Because of the industry we are in, hygiene is an important part of the beauty treatment process but one that is lax depending on the exact category you’re in. Aimee, our Content Manager, and I, wrote a blog post for all of our Users stressing the importance of hygiene while reassuring them I was available to discuss their earnings if they need to.
Continuing communication for the following weeks:
- How to reassure their clients that they’re still Open For Business.
- How to communicate locality/daytime apts to their clients who are not getting public transport and working from home.
- Client Refunds in case a client falls ill outside the free cancellation period.
- How to diversify their skills so they can do online workshops, tutorials etc
- Communicate to Clients the importance of Support Your Local Beauty Pro
- Treatments to book to increase immunity and reduce anxiety
- Services that can be done on video like Tarot and Coaching
I’m toying with the idea of working out a plan to pay our Beauty Pros for mechanical turk tasks of labeling our image data to improve search to keep them earning. They’re the best folk to do it anyway!
“Review your product goals on Thurrsssdaaayyyy”
I spent Thursday sorting out Product as this would now be our only cost. Letting go of a full-time contractor PM and a PM Consultancy firm, and hiring a super experienced part-time Director or Product to start Monday to be as effective as possible, with fewer hours.
I then tried to clear some headspace to review our Product Goals, our metrics and so on. Because Beautystack has social features that other booking platforms don’t have, such as the ability to like, save, comment, follow on your fave treatments etc, we have the opportunity to create engagement that doesn’t just center around our GMV. I also engaged 2 luxury Beauty Pros for exclusive agreements, thinking that high spenders are less likely to forgo treatments in a recession. Beauty is pretty recession-proof already (Remember I started WAH in 2008!)
Again timing is great as we are approaching a new OKR cycle allowing me to recalibrate our metrics. Focus on the things you CAN CONTROL, and don’t despair about the thing you cannot. It may swing our whole Series A story, but that’s okay, everyone is experiencing this globally and you won’t be the only Founder having to explain a big drop in certain metrics. The questions is, which of the metrics can you help rise?
Either way, ask yourself, what features in your Product will thrive in the time of Coronavirus. Push them to the forefront of your user experience.
I also did some self-care went to a meeting on Thursday to remind myself we are human, all too human.
“Make a Work from Home Plan on Fridaaaaay”
Okay so now the mania had really escalated, especially in the tech Whatsapp groups I was part of, who were sharing Emergency Disaster Plans that other startups in London had triggered. I decided that next week the team would WFH, if only as a test should something more critical happen. Our new PM, Louise wrote an amazing plan, did some video tests (we are a small team so going to use Slack Calls for now so no additional costs) and we had a final All Hands in the office which someone described as having the “atmosphere of the last day of the school term.” and then the team had a drink at our makeshift office bar “Ye Old Stack.
Meanwhile, I did the last in-person feedback to our UX team on our upcoming releases (Brand new Onboarding! Create an Appointment! Customise your Booking Policy! Have multiple work locations!) and recorded more IG stories for our Users.
I wanna thank our Beautystack Crew for being understanding, stoic (in the true sense of the word) and keeping calm and carrying on…
Then I went to the theatre but was naturally distracted. The theatre audience was packed. No panic among the middle classes. How very British.
and on Saturday and Sunday I chilled with Roman…
So to summarise:
1 — Save Money
2 — Keep your stakeholders (team, investors, users) informed
3 — Focus on your Product
4 — Work from Home until further notice.
What this week has made me realize is that I feel quite calm in a crisis, one might say I thrive in adversity. Maybe I’m a Wartime CEO and it was the Peacetime of 2019 that left me confused and prone to making mistakes.
Now is the time to show you tenacity, your resilience and your ability to adapt and diversify. Now is the time you’re allowed to do stuff that doesn’t scale and be as scrappy and ingenious as possible to ensure survival. I labeled this post “Early Stage Founders” because if you’re small and early in your journey, you may think you do not have the resources to see you through. But remember, it’s not the strongest who survive, it’s the ones who are most responsive to change.