Product Acceleration is critical for startups’ survival during COVID crisis
At Product10x, we fully understand the ramifications of Covid-19 on startups looking to be fundraise ready, launch, or scale during these tough times. Having talked to several startups and attending VC events, we have compiled some guidance for you to think through.
At Product10x, we fully understand the ramifications of Covid-19 on startups looking to be fundraise ready, launch, or scale during these tough times. Having talked to several startups and attending VC events, we have compiled some guidance for you to think through. During times of crisis there are plenty of tips for startups, and in this article we cover some important ones.
Operations
Plan for cash runway for 12-24 months- 50-60% haircut is recommended on your operating expenses.
- Throw out your 2020 forecast; Re-do Scenario planning and contingency plan
- Don’t dismantle too much, do it smartly.
Product/Sales/Customer Success
- Redo your product roadmaps now!
- Stay close to your customer - retention is critical at this time.
- Make use of cheaper investments that may become available on R&D and other areas. Develop Must-Have features and throwout Good-to-have and Nice-to-have features.
- Product market fit is going to be super important.
Marketing
- GTM strategy will most likely change, marketing events are going to change forever.
- Digital marketing will need significant changes due to cost pressures on Marketing spend and will change for the better, create your plans now.
- Explore partnerships with an intent - don't spend many cycles on partnerships unless it directly affects your company or customer.
Fundraising
- Fundraising will be tighter but is not entirely out of question.
- Make a Covid-19 impact deck for your business or your customer.
- Don’t back off from fundraising - But be cautious about your valuation.
- Be opportunistic about M&A and partnerships
- Find a co-investor to speed up to go to market and channel strategies.
- Run scenario analysis for revenue models in a no IPO window for the next 18 months and evaluate your cost structure
Industry
- Edtech, Healthcare, and Collaboration/Productivity are still very strong - if your startup is in this area, you will emerge stronger than ever.
- The industry expects 60% lower total capital available in 2020
- Welcome to the Zoom (remote working) economy and embrace it
- Protect your installed base, pivot to different industries.. and switch from sales to customer success.
Here is our strategic view for every startup in these times...
- Product strategy pivots are necessary to capitalize on market opportunities when the Covid-19 situation ends.
- Go to market plans for startups that require careful consideration, leverage experts in the industry who have gone through such downturns.
- Pricing plans require creative adjustments to incentivize for the short term with the ability to scale back up for the long term
- Look for opportunities in M&A to drive inorganic growth to be ready for the uptick.
- Drive product roadmap and optimization relentlessly to prioritize and maximize the money on hand.
In summary, economic downturns lend themselves to times when great companies are born in the Cloud, Social, Mobile, IoT, AI, and Visualization technologies. It is during times of crisis there are plenty of tips for startups such as the ones we've covered here.
If you are a startup, we would love to hear from you on how you are navigating these tough times or need help with Product Acceleration. Send us a message at hello@product10x.com.
About the Author: Suresh Madhuvarsu is a serial entrepreneur and investor. He is the Managing Partner of Product10x Accelerator, a SaaS accelerator that helps founders build and launch successful startups. He is also the Co-Founder and CEO of Salestable, a purpose-built sales readiness platform for SMBs.
Suresh has over 20 years of experience in the technology/SaaS industry. He is a 4x founder with 2 exits. He is also an active angel investor and mentor to early-stage startups. Suresh is passionate about helping entrepreneurs build successful businesses. He believes that technology can be used to solve real-world problems and improve people's lives.
About Product10x: Product10x is a SaaS accelerator that helps founders build and launch successful startups. The accelerator is run by experienced operating partners who have "been there and done that." Product10x provides founders with mentorship, advisory, and access to a network of investors and partners. The accelerator focuses on Product Led Growth (PLG), Sales readiness, and Fundraise readiness, helping founders all the way from product to go-to-market.
