Phase II: How can your business survive the COVID-19 crisis?
Confinement was just the beginning. What mentality do you, as an entrepreneur, need to adopt for everything that’s coming next?
On the most basic theoretical level, the economy has the supply side, companies that make goods and services, and the demand side, customers who want those goods/services. A market is simply those two sides coming together and finding a (constantly shifting) equilibrium.
The COVID-19 crisis did something unique: it’s the first time we’ve ever seen a crisis where there’s a complete breakdown in both supply and demand. 3 billion people confined in their homes, that’s 3 billion people who demand less, 3 billion people who no longer need a ton of goods and services. At the same time, there are goods and services that those people do still need, but the companies that provide them aren’t able to respond because their activities have been brought to a halt.
That’s how we’ve got what’s going on all around us: hundreds of millions who are losing their jobs, trillions of dollars in destroyed value, and an entire system brought into question.
Anytime there’s a singular moment of crisis like this, everybody with an ideology comes rushing forward. You’ve got the people who are religious telling you it’s a punishment from above, the environmentalists telling you it’s nature taking its revenge, the anti-capitalists telling you the revolution is finally here, the capitalists telling you that only more capital will save us…
And they all find strength in the fact that they’re speaking directly to people’s fears and anxieties. Between the virus itself and confinement, this has been a huuuuge moment for fears and anxieties.
My take? It’s pretty simple: Nobody knows anything right now. Including — especially! — me. I don’t know what’s going to happen next. But I can tell you what’s already happened.
Supply and demand came to a complete halt for 2 months. And no matter what, the impact of that is going to stay with us for years. It’s like a speeding train. If you’re going along at 300 km/h, and the brakes suddenly kick in and everything screeches to a halt, you know what comes next. Even once the train starts moving again, it takes a long time to get back to where you were before.
So people ask, Is the economy going to come back? Is the economy going to crumble? Are we going to completely reinvent our social system? Are we going to go back to normal?
All of that is in the future. It’s a mystery. And as an entrepreneur, it’s not your concern.
As an entrepreneur, your concern is figuring out how to make your business survive in a world that is going to take a long time to get back up to the speed.
Another thing that’s totally new in this crisis is that it’s not caused by a war, or by a financial product, or by speculation, or by anything like that. It’s caused by a virus, a virus that doesn’t have any nationality, that doesn’t stop at any border, that can affect all of us, that is invisible, and that every country is dealing with in its own way, without any real international coordination. That creates even more uncertainty for you to deal with as a business owner.
Faced with all this, there’s only one thing to do: make sure you stay completely, 100%, absolutely pragmatic over the short term. You have zero margin for optimism. If you are thinking that things will get better, that the economy will restart quickly, and you’re wrong, your big risk is getting kicked out of the game completely.
That’s the case for most entrepreneurs right now. If you’re in the lucky few who are doing well now, who are even getting growth, the question is still there: “How do I go faster in such an uncertain world?”
In that case, your determination is going to be the key factor. Even with a company that’s doing well, in a chaotic world it’s going to take an enormous amount of energy and intensity to keep things on the right track.
Everything you do in a recession/depression as bad as this one is going to take more effort than before. People are spending less money, less quickly. Opportunities are restricted. That means you’re going to have to do things by hand, to do the hard work of selling.
Be paranoid. Look at your situation and ask, “What can I do today to ensure that my business is still alive tomorrow? How can I act to make sure that I stay in the game?”
Reduce your timeline. It does you no good right now to put together a 6-month plan, even a 3-month plan. The only way to be as agile and inventive as you need to be right now is by acting and reacting on a short timeframe. Don’t make decisions and investments that are only going to make sense over the longer term.
Things are changing from day to day right now. It’s way easier to face that uncertainty, both emotionally and financially, by planning and acting from week to week.
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