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
  • 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”

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

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”
  • 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
  • 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’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
  • 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
  • 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
  •  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”

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
Starting Greatness with Mike Maples : , , , ,
Notes By Alex Wiec

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