Metaphor & GIFs ahead.
Sky the limit
When the curve is on the rise, even though we secretly fear the crash, we act like nothing bad could ever happen.
Expectations are high, conditions are great and small mistakes here and there don’t seem to have much impact. We raise more money, burn more, take more risk & some shortcuts.
The tires are burning a little, but every other players are driving super fast as well.
In the paddock, people are kind of enjoying the show and somewhat resting, even though they wear their equipment, ready to act if necessary.
Then comes the rain
You had planned everything, except this.
It came so fast, so unexpectedly. There is no choice, you must act accordingly here & now if you want to have a chance to make it throughout the turbulences towards there & then.
Everything is changing. Fast.
The visibility is limited, the new conditions imply adaptation, and small mistakes suddenly seem like they could be fatal.
Everyone is rushing into the paddock.
The moto is simple: keep the engine running, manage the duality of driving reasonably fast. Focus on the things that matter. Speed of reaction, pace of execution, precision of action.
Speed of reaction is critical. You can’t go back in time, everything you do now matter for the future, every step you miss is a potential liability or fatality. Cash is a variable, not an infinite resource. Be extra-rational.
Pace of execution. Keep high velocity, even though it’s under a lower degree of activity. Keep your people busy and active, but also socially present with virtual gatherings and regular updates.
Precision of action. Your margin of error is limited under uncertain and tough circumstances. Require excellence from your team, in everything they do. Accountability gives a sense of togetherness, it’s the ciment of your culture.
It’s not a question of whether the rain will stop or not. It’s fucking raining and you have no clue when it’s going to stop nor how long it will take for the track to dry up.
CASH, CULTURE, CREATIVITY.
Your cash is impacted by your burn rate, your churn, your growth. the burn rate depends on your cost structure, subject to churn and growth rate. It’s simple math. Your churn might increase, your growth rate might decrease. Do not add additional pressure on your cost structure. On the contrary, contain it or better, be more rational about it. Not only your survival is at risk, but also your valuation will probably take a hit. Be cautious, take additional money if you can to extend your runway.
Your culture will hold strong only if you manage to keep the pyramid of trust, commitment and results intact and reinforced. Communicate regularly, thoroughly towards employees, investors, partners, customers. More importantly, listen to them as they share their fears and concerns. It’s in the struggle that we see the true face of the culture one has crafted.
Let’s be optimistic for a moment. The best thing that can happen during the worst moment is that it triggers a mechanism of singularity as your system reference all of a sudden ceases to exist as you know it. You’re out of your comfort zone, which can foster creativity under the right circumstances. Use this as an opportunity for your team to come up with innovative ideas, different paths and approaches to problems and challenges.
Now what ?
Some of us benefit from better conditions under those circumstances, some of us already suffer from brutal consequences, regardless fairness that isn’t the currency of the world we live in. To mitigate the impact, we shall be coming together to help one another.
Startup tourists will soon become deserters.
As for the others…
Keep riding the tide until the sun rises again because it always does :)