Responding in Unprecedented Times
Big thanks to Charlie for letting us highlight this article originally sent through email newsletter! Check out his blog here for more great content!
— by Charlie Paparelli
None of us, including experienced business people, have led a company in such a time as this. Whole industries like transportation, entertainment, and sports are voluntarily shutting down. Government, education, and churches are halting, while healthcare, food, and household supply businesses are booming.
Your customer problem stack was just reshuffled. The market demand for your product has likely changed.
It all starts with consumers like you and me.
I am interested in learning about how to not get sick. I am not thinking about startup investments. I am thinking about the health of my family. I want to know what my new “normal” will be.
How will I conduct my business in this environment?
What about my passive investments?
How do I interact with my children and grandchildren to ensure all remain healthy?
We have travel plans? What do we do?
These are some of the questions I am asking myself. But they are questions for which I have no answers. It is like I’ve been thrust headlong into the bottom three segments of the Maslow hierarchy of needs.
I jumped from thinking about my self-fulfillment needs to my psychological and basic needs.
That’s a big change in thinking.
So what happened? My problem stack was just reprioritized.
This is happening in your household and your business. As a leader in your company, you must recognize your entire employee base is doing precisely this, too.
What about your employees?
You can address the concerns of your employees. All businesses are doing this. There are announcements like:
Work at home
Have more video meetings
Hold only small group, in-person meetings if absolutely necessary
All of these solutions are contagion control strategies. All of these solutions are in place to address employee fears.
You now need to start thinking about your customers.
Every business has a problem stack. This means your customer has a problem stack. Has this stack been reshuffled? Is the problem your company solves at the top of its stack?
If the problem you solve is no longer at the top of the customer’s newly reshuffled problem stack, you’ve got a problem. Your sales will fall precipitously. You’ll hear your prospects say, “That’s not important to me right now. Call me when all this settles down.”
If your prospects are no longer buying because they have bigger fish to fry, admit it. Don’t rationalize it away. It won’t go away. Face the problem head-on.
You have three options as an early-stage company.
Stay the course
Pivot and hope to grow
Cut expenses and survive
Stay the course
Staying the course is the lowest risk option. You do this because the problem you solve actually became your prospect’s most pressing problem. You discovered these dramatic market changes are playing right into your hand. Thank the Lord for this if you are in this position.
The remaining two options are very big bets. Each of these bets is the equivalent of going all-in with your early-stage company.
Pivot and Hope to Grow
Pivoting might just be the best solution if it is available to you. Your pivot is to change your product to point to a problem higher in the customer’s stack. It addresses a problem your customer has right now. The problem the customer must solve because it was placed right in the middle of his lap in this crazy environment.
If you can make this move, then do it. Make sure you also change all the market and sales material to support it. This is your new market position. Hopefully, you don’t need to change your market and buyer. The more changes you have to make, the riskier the pivot. Repositioning the product to the same market is best. This will hopefully lead to continued sales growth and the ever-important cashflow.
Cut Expenses and Survive
This is the dig in, hunker down strategy. Sell what you can. Conserve cash. Live another day.
If the problem you solve moves so far down the customer problem stack, then a repositioning pivot may not be possible. If this is the case, you have to live another day until normalcy returns to your market. Your goal in choosing this strategy is to still be there when the customer problem stack rights itself.
I’m sure you and I both had an initial emotional reaction to these market changes. But then you realized you are a leader. People are looking to you for answers. To set the tone. To give them hope. They want you to lead.
There is a favorite verse I quote often to myself during times such as this.
“God did not give me a spirit of fear, but of power, love and self-discipline.”
Define the problem. Make a decision. Go!
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For more information on COVID-19, please see our page highlighting some of the best resources out there for Faith Driven Entrepreneurs in this season.
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