
May 12, 2020
How Entrepreneurs Can Survive & Thrive COVID-19 | Steve Blank on Starting Greatness with Mike Maples
Check out the Starting Greatness Episode Page & Show Notes
Key Takeaways
- We are on the verge of dramatic changes
- “This is not a recession it’s a mass extinction event for a good number of businesses and industries” – Steve Blank
- However, in crisis comes opportunity
- “For founders and employees who fight the good fight, there will be a morning after, the sun will come up”
- Look at the top 5 things your company is buying to survive and what things you cut out from your budget
- You want your product to be on that top 5 buying list for your customers
- In the last decade or so, startups forgot about revenue and profits, and instead went for blitzscaling but that is backfiring now
- “[Blitzscaling] worked great until it didn’t” – Steve Blank
- Now is the time for startups to focus on revenue and hopefully profits
- “[Blitzscaling] worked great until it didn’t” – Steve Blank
- If you’re a startup CEO right now, survival equals 3 things:
- (speed of understanding) x (magnitude of pivots and cuts) x (speed of execution)
- Before laying off employees, the founder and executives should cut their compensation to build solidarity among employees
- “I’d be thinking about how do I eliminate the free food before I eliminate the hourly worker salary” – Steve Blank
- “If you’re going to go down, you might as well go down with people remembering how well you treated them”
- “I’d be thinking about how do I eliminate the free food before I eliminate the hourly worker salary” – Steve Blank
Intro
- Steve Blank (@sgblank) is an entrepreneur and author known for developing the customer development method that launched the lean startup movement
- Host: Mike Maples (@m2jr)
Books Mentioned
- Steve is the author of :
Advice to Entrepreneurs
- We are on the verge of dramatic changes
- “This is not a recession it’s a mass extinction event for a good number of businesses and industries” – Steve Blank
- However, in crisis comes opportunity
- “For founders and employees who fight the good fight, there will be a morning after, the sun will come up”
- However, in crisis comes opportunity
- “This is not a recession it’s a mass extinction event for a good number of businesses and industries” – Steve Blank
- Some of the biggest companies today were founded during the 2000 and 2008 recessions
- Great founders and employees are incredibly resilient and will meet the challenges
- Questions entrepreneurs should ask themselves:
- How is the economy is performing?
- How are our customers are doing?
- How is the market is doing?
- Try to assess which direction things will go
- Use Zoom to see how people respond to your product
- If you record the session, you can watch how their facial expressions change and identify what they like and don’t like
How To Survive Hard Times
- Look at the top 5 things your company is buying to survive and what things you cut out from your budget
- You want your product to be on that top 5 buying list for your customers
- In the last decade or so, startups forgot about revenue and profits, and instead went for blitzscaling but that is backfiring now
- “[Blitzscaling] worked great until it didn’t” – Steve Blank
- Now is the time for startups to focus on generating revenue and hopefully profits
- “[Blitzscaling] worked great until it didn’t” – Steve Blank
- Venture capitalists are reevaluating their portfolios and reconsidering who they fund
- If you were supposed to get funding, try to get it sooner than later
- “If you don’t have a year or two of cash, you need to take some action now” – Steve Blank
- Downsize to cut your burn rate if necessary
- “If you don’t have a year or two of cash, you need to take some action now” – Steve Blank
- If you were supposed to get funding, try to get it sooner than later
- If you’re a startup CEO right now, survival equals 3 things:
- (speed of understanding) x (magnitude of pivots and cuts) x (speed of execution)
- “You can’t sit around waiting for people to tell you what to do or else the circumstances are going to overtake you” – Steve Blank
- (speed of understanding) x (magnitude of pivots and cuts) x (speed of execution)
- This is also a time to reevaluate your business model
More Advice For Surviving
- OODA Loop: Stands for observe, orient, decide, and action
- The strategy comes from the Air Force but it can be used in business as well
- Observe the current economy, orient where you want to go, decide to head that direction, and take action to get there
- The strategy comes from the Air Force but it can be used in business as well
- Having hope < Having a strategy
- Once your executives and investors agree on a strategy moving forward, you need to share that with your employees
- People need to understand that it’s not the company’s mistake that business is down; the whole world has been impacted and is changing
- “I don’t mean that you need to act badly, but you do need to act ruthlessly” – Steve Blank
- People need to understand that it’s not the company’s mistake that business is down; the whole world has been impacted and is changing
- Once your executives and investors agree on a strategy moving forward, you need to share that with your employees
- Also, seek help from your employees. Ask them to contribute ideas to cut costs or create new business models
- If you’re going to lay people off, do it all at once. That way employees won’t be anxious that they may lose their job next
- Before laying off employees, the founder and executives should cut their compensation; this helps build solidarity among employees
- “I’d be thinking about how do I eliminate the free food before I eliminate the hourly worker salary” – Steve Blank
- “If you’re going to go down, you might as well go down with people remembering how well you treated them”
- “I’d be thinking about how do I eliminate the free food before I eliminate the hourly worker salary” – Steve Blank
- Before laying off employees, the founder and executives should cut their compensation; this helps build solidarity among employees
Additional Notes
- Use this crisis as an opportunity to reflect on your life
- Perhaps you aren’t passionate about your company or job and want to do something else
- “Now’s the time for carpe diem” – Steve Blank