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Covid-19 Countermeasures for Startups

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Helping startups deploy countermeasures to survive the crisis created by Covid-19 (Corona Virus). It provides tips to streamline their business and #breakthebreakout

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Covid-19 Countermeasures for Startups

  1. 1. Mar 2020 w w w . j u s t i n n o v a t e . i o #BREAKTHEOUTBREAK VID-19C Countermeasures For Startups Corona Virus Image Credits: https://dribbble.com/CreativeMasH
  2. 2. This Is Not A Drill: Prepare For The New Normal Accelerate the Business Recovery Cycle • Operations: Direct impact on sales, supply chain, distribution, cashflow etc. • Continuity Measures: enforcing remote working and limiting interactions • Rationalization: tough decisions for cost optimization and cash preservation • Stamina: businesses develop stamina to manage for bounce back over extended period • Stimulus: begin economic recovery due to deployment of Gov. stimulus packages • Acceleration: proactive measures to expedite recovery and make up for losses Phase 1: SLOWDOWN (2 quarters) Phase 2: STABILIZE (2 quarters) Phase 3: RECOVER (4 quarters) Reality: COVID-19 triggered the start of a new economic downturn. Recovery will take a while Déjà Vu: This crisis is reminiscent of the ‘01 dot com bubble burst and the ‘08 financial crisis Impact Impact ImpactBackground innovate 2 QUICK WINS Decisions NO REGRETS Decisions BIG BETS DecisionsACTIONS References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis • New Norm: Business adjusting to new market / customer reality • Economic Impact: job cuts, reduced trade, lower income / consumer spend • Trajectory: positive changes to business momentum and growth trajectory
  3. 3. SUPPORT YOUR PEOPLE, UPHOLD YOUR CULTURE PUT YOUR BUSINESS MODEL TO THE TEST PROTECT PRIMARY REVENUE STREAMS AND CUSTOMERS STREAMLINE & STABILIZE BUSINESS OPERATIONS OPTIMIZE COSTS AND PRIORITIZE INVESTMENT GLOVES-OFF TO DEFEND & GAIN MARKET SHARE 21 3 54 6 innovate Startup Checklist Organize Your Efforts And Define Priorities 3 References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis
  4. 4. SUPPORT YOUR PEOPLE UPHOLD YOUR CULTURE • Communication: over communicate and be transparent • Messaging: it’s critical that your get the message right ü Regular situation + business updates to groups and individuals ü Implement Virtual “Water Cooler” sessions for casual chat ü Establish meetings structure and agendas for the entire company ü Build “CAN DO” spirit. Explain the challenge but also the plan ü Reassure (but don’t overpromise) on job security ü Ensure ongoing feedback whether you think employees need it or not 1 Support Your People, Protect Your Culture Demonstrate True Leadership, Adaptability & Resilience innovate 4 References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis • Protocols: implement hygiene protocols; • Policies: revisit and adapt current policies See CDC https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html • Tools: secure the necessary comms tools (e.g. Zoom + Slack) and provide training if necessary • Access: senior leaderships crisis team accessible to all employees 24/7 for emergencies; business or personal ü Facilities: perform routine environmental cleaning ü PPE’s: provide personal protection equipment e.g. gloves, masks, sanitizers etc. to all staff ü Deliveries: Stop food deliveries. Allow only business mail ü Stay Home: emphasize staying home when sick. Ensure everyone understands that there is not shame in it, no impact on jobs and that it’s for the collective good ü Work from Home; implement WFH polices, schedules, etiquettes etc. Physical meetings only if mission critical (social distancing rules apply) ü Travel: follow travel advisory + stop all non-essential travel
  5. 5. • Optimize marketing spend to drive demand • Aggressive marketing, selective repricing • Ensure security of supply • Temporary suspension of operations / locations • Spend freezes and no- regrets cost reduction • Tough cost reductions • Conserve cash for controlled default • Right size to core innovate 2 Put Your Business Model To The Test Plan For The Worst-Case Scenario 5 References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis EXAMPLES • Exit underperforming BUs / geos / channels
  6. 6. • Proactivity: reach out to customers and give comfort on business continuity (build trust and loyalty) • Focus: bespoke Sales / marketing initiatives for high-risk customers • Investment: reallocate resources to accelerated sources of revenue • Priorities: actions to neutralize risk in key segments + geos + channels • Pipeline: review sales pipeline and focus on late stage opportunities • Pricing: optimize pricing to maximize revenue for the short and long term Mitigate Revenue Declines Ensure Customer Centricity • Decline in Demand: shifts focus to essential goods and services • Move to Online: due to personal health risks, customer revert to online purchases • Propensity of Spend: consumers holding back as they face uncertainty Understand Customer Shift innovate 3 Protect Your Revenues and Customers Take Proactive And Decisive Action 6 References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis
  7. 7. ORGANIZE: re-asses capabilities of your supplier / partner network, understand challenges and mitigate REVALUATE: review sourcing strategy + create back-ups + ensure supplier demand fluctuation flexibility. DEEP-DIVE: identify business vulnerability and impacted teams (sales, development etc.) MONITOR: regular checking-ins to pinpoint risks. Revise KPI’s across BU’s / geos / channels and track MOBILITY: move resources to where they are needed most, irrespective of function AGILITY: reorganize into smaller teams with subject matter experts handling tasks E2E to minimize risks innovate 4 Accelerate Operational Stabilization Quickly Adapt To The New Normal 7 References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis SITUATIONAL ASSEESMENT SUPPLY CHAIN & CAPABILITY RESOURCE REALIGNMENT 3) Liquidity requirements 4) Outsourced staffing 5) Geographic variations 1) Front-line operations 2) Physical facilities 3) IT infrastructure CONTINGENCY PLANNING
  8. 8. • Detailed cost analysis with tiered cost- cutting (short, medium + long term) • Perform regular liquidity analysis and monitor balance sheet items (cash, debt, receivables/payables). Renegotiate terms where possible OpEx (P&L) • Freeze non-revenue generating hires • Pause contingent workforce • Stop non- critical training • Marketing focus only on high ROI areas • Suspend prof. services where possible • Cancel non-essential travel CapEx (Balance Sheet) • Negotiate payables with suppliers • Re-prioritize major capital investments • Identify future milestones that trigger additional corrective actions (moving to AMBER and RED action plans) • Align impact of corrective actions with investors and team. Be ready to deploy if milestones are reached • Benchmark actions with competitors to ensure timely responses MINIMIZE EXPENSES CRITICAL MILESTONES RIGHT-SIZE COSTS ü Renegotiate pricing and supplier terms ü Optimize overheads ü Initiate supply chain rationalizing protocols ü Less fixed more variable costs where possible innovate 5 Optimize Costs and Prioritize Investment Cut The Fat But Not The Muscle 8 References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis
  9. 9. • Differentiate vs. competitors e.g. product, CRM, M&A strategy • Deliver sustainable cost advantage with effective optimization programs • Optimize supply chain to improve agility + capability • Ensure strong balance sheet to support strategic business decisions • Continue investment in marketing, product, CRM to maintain market share • Monitor macroeconomic and industry trends, identify gaps to capitalize on • Build strong barriers to ensure resilience for future shocks • Allocate resources smartly and identify gaps (people, processes etc.) to be addressed to protect business • Capitalize on change in customer behaviors and be ready to act quickly • Be decisive and agile with investment opportunities to maintain competitive advantage as customers come back strong TACTICS TO OUTSMART COMPETITION BUSINESS BOUNCE-BACK READINESS ADAPT TO NEW CUSTOMER DYNAMICS innovate 6 Gloves-off to Maintain & Gain Share Be Ready To Bounce Back 9 References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis
  10. 10. Countermeasures Cheat Sheet innovate 10 References and Sources: Bain & Company - Global Ventures - Just Innovate Analysis
  11. 11. Helping Businesses & Tech Startups Build & Scale Their Products & Services w w w . j u s t i n n o v a t e . i oi n f o @ j u s t i n n o v a t e . i o W E ’RE INNOVATION ARCHITE CTS Digital Transformation Product Innovation Customer Experience Growth Hacking> > > > #STAYHOME #STAYSAFE=
  12. 12. innovate 12 Disclaimer The material and Information contained in this document are for general information purposes only. You should not rely upon the material or information in this document as a basis of making business, legal or any other decisions. The content in this document and the opinions expressed are done in good faith. Just Innovate, the directors and employees take no liability, make no representations and gives no warranties of whatever nature in respect of this document, including but not limited to the accuracy or completeness or reliability or suitability of any information, facts and/or opinions contained herein whether expressed or implied. Any reliance you place on such material is therefore strictly at your own risk.

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