Over the past weekend Jason Calacanis – CEO of Mahalo and Founder of Weblogs Inc. – sent out a note titled (The) Startup Depression to his email list. Interest in this ‘wake-up call’ email is growing thanks no doubt to the single largest drop in the history of the stock market happened two days after Calacanis hit send. The entire post is worth a read but for those that are too busy checking the stock tickers, here’s his list of 10 specific things that anyone running a startup can do right now to stay on track and weather the storm.
1. Execute better: This is fairly simple, as I describe above. Rank yourself and your performance and improve it.
2. Grow the talent you have: When the market is down, it’s a great time to get your team educated and to the next level. Invest in training and education of your top people, because they are the ones who will lead your company through this mess.
3. Firing the average people: Again, it’s totally politically incorrect, but I highly recommend firing anyone who is good or average. Startups are an Olympic sport and every slot on your team is critical. You wouldn’t put a “good” swimmer in a relay, would you? Don’t have one in your startup. Fire the good and replace them with the great.
4. Cut spending every where you can: Recurring costs like connectivity, phones, rent and insurance are things that you can easily cut. Go to each of your providers and ask for 20% relief immediately or you’re leaving. Most, not all, will give it to you.
5. Find a revenue stream and ride it: If you don’t have a revenue stream right now, you’d better find one on Monday. Seriously, by the end of the day. Once you find this revenue stream, ride it. Put at least 25% of your effort into bringing in revenue.
6. Focus on your profitable clients: If you have revenue, start focusing on which clients are most profitable. Take them to lunch and figure out how you can over-service them and sell them another product (or more of your current product). You’re gonna want to protect these accounts because the folks reading Point Five are going to be calling them!
7. Make your top ten 10% better: Look at the top ten aspects of your business and come up with a plan to make each 10% better in the next 30 days. Ask everyone in your company to make suggestions for the 10% better program and execute on the ones that will provide the most bang for the buck. Sometimes, there are things you can do today that will make something 10% better for free–you just haven’t brainstormed enough.
8. Hold an optional off-site breakfast meeting on a Sunday and see who shows up: If folks don’t show up for you to grow/save the company on a Sunday for a two hour breakfast, they probably aren’t going to step up when the sh#$%t really hits the fan. You need to know who the real killers on your team are and you need to get close with them now. Again, it’s fine to have 9-5ers on your team–if you’re the Post Office. You can’t have them at a startup company. Note: if you reading this and saying I’m anti-family, save it. Folks don’t have to work at startups and some of the hardest working folks I’ve met have families and figure out how to balance things.
9. Build marketshare: One of the best things to do in the down market is build marketshare. Look for competitors that are going out of business and buy them or just “steal” their clients and talent (i.e. pick them up).
10. Raise money: I know I said above most folks won’t be able to raise money in the down market, but that’s not because the money isn’t out there–clearly it is. The issue is that the big money out there doesn’t want to fund small ideas that are in the death spiral. Build a plan based on revenue and taking market share and folks will consider funding you.