Well, it's here.
Both of our Slidebean offices, New York and San Jose, are in areas with active coronavirus spreading, and we were forced to take action.
In this video, we'll go over the specific actions that our team took to reduce contagion, as well as my perception of the startup and fundraising market in the next few months.
I am a big believer in in-office collaboration. The power of an in-promptu meeting or discussion, the random chats at lunch, the coffee breaks... this is the stuff that brings a team together.
Our hiring process for the first employees of the company prioritized a cultural fit. We ran a Myers-Briggs personality test on every candidate and matched their compatibility to their direct manager and the rest of their teams.
While we are less strict about it now, I believe this exercise was vital in the early stages of the company to define what our company culture is.
Most team members have at least 2-3 close friends in the office, with whom they voluntarily hang out outside work. To me, this is a track of our success in getting like-minded people together.
But back to remote work, I was very much aware of the value of letting people work from home. Our first rule was that the WFH schedule was fully flexible but that people should come into the office Tuesdays plus one other day of choice.
Slowly, I've given in to more flexibility, which has made people happy. We conduct quarterly surveys to check :)
However, not everyone is compatible with the open-ended, free form nature of remote work. Luckily, all of those employees have been filtered out of our company, which turned out useful for our current situation.
We adopted full remote work today. Nobody needs to come into the office unless there's a specific in-person meeting requirement, which should be rare.
If people need to come into the office and they don't drive, there will be company-sponsored Uber rides to avoid public transportation.
Now, this informal in-office collaboration I was talking about is still critical to me. We have solved it by adopting tandem.chat, which is a fantastic solution to replicate this.
In short, it lets you talk to somebody on the team without having to 'call them.' It's a click-and-talk approach. It also features a water cooler, which we renamed to the coffee machine—just a place for people to hang.
We also made a lunchroom to get some company if you are grabbing lunch alone. Once again, it's all about replicating the in-person office conditions.
In regards to travel, we canceled all non-essential company trips, and we brought the New York team back to Costa Rica, at least for the months to come.
I don't want to get political here, but getting sick in the US sucks. $3,500 for a COVID-19 test is just ludicrous. The Costa Rican universal healthcare system is miles better, and having everyone here is just better. I don't get to vote in the US, but you can probably figure out my inclination.
I wrote this script on Monday, March 9th. The Dow Index dropped over 2,000 points today, and it seems that we are heading into a recession.
Our company has been profitable for over two years, which lets me sleep at night.
Not all venture-backed companies can aspire to profitability. Some companies require accelerated growth to be able to become the businesses that the founders set out to build, but in our case, being close to profitability saved our company.
Even when we had just raised our last round of funding, our burn rate never exceeded $30,000/mo. $30K/mo was close enough to profitability so that we could adjust and restructure our business in a few months, and stop burning capital... which we eventually had to do.
Sequoia published a fantastic read on Medium a couple of days ago, which goes over their read of the market.
The biggest concerns noted were,
So, Sequoia's suggestions revolve around QUESTIONING your business assumptions and figuring out if a change in strategy is required. Especially around-
Cash runway. Do you have as much runway as you think? Could you withstand a few poor quarters if the economy sputters? Have you made contingency plans?
Fundraising. Private financings could soften significantly, as happened in 2001 and 2009. What would you do if fundraising on attractive terms proves difficult in 2020 and 2021?
Sales forecasts. Even if you don't see any direct or immediate exposure for your company, anticipate that your customers may revise their spending habits.
Marketing. With softening sales, you might find that your customer lifetime values have declined, in turn suggesting the need to rein in customer acquisition spending to maintain consistent returns on marketing spending.
Headcount. Given all of the above stress points on your finances, this might be a time to evaluate whether you can do more with less and raise productivity.
Capital spending. Until you have charted a course to financial independence, examine whether your capital spending plans are sensible in a more uncertain environment.
Their strongest quote,
Having weathered every business downturn for nearly fifty years, we've learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology. As Darwin surmised, those who survive "are not the strongest or the most intelligent, but the most adaptable to change."
Again, I think most of their advice is pretty relevant.
I like to close my videos with positive notes. I want to remind you that unicorns like Airbnb, Square, and Stripe were founded in the midst of the Global Financial Crisis. New opportunities opened up, and these companies were able to tackle them to create fantastic companies.
Other uplifting news around coronavirus (courtesy of Reddit)
That's all for today. If you are in lockdown, we have a lot more videos for you to watch, so hit that subscribe, and then wash your hands!