May 13th, 2020 | By: Wil Schroter
Recessions breed incredible opportunities for startups, if only us Founders knew where to look and how to leverage them.
At its core, a recession distracts everyone all at once, meaning only a select few will have the fortitude and foresight to find advantages. What we need to do during these times is step back and look at the overall picture to understand not just what's happening to us, but what's also happening to everyone else.
This is where the opportunity begins.
It's really hard for anyone to stay focused on growth when the walls are closing in around us. That's why most of our competition will be circling the wagons and staying completely fixated on internal struggles and survival. This is a golden time for us to be on the offensive. Where they're worried about setting up layoff plans we'll be focused on revising our customer acquisition strategies. While they are trying to combat employee morale we're going to double down on getting our team as focused as possible: on growth.
We're going to evaluate every step backward as an opportunity for us to take a step forward.
In boom times it's so tough to stand out, whether we're trying to get press attention, attract great talent, or find new customers. But when a recession hits, not only are there far fewer people vying for attention, the attention that is created is magnified within every place that matters to us.
Now is the time to get aggressive on our marketing campaigns, especially those that are not cost-driven, like social. Now is the time to post some ads for folks that we've been dying to hire, even if we can't pull the trigger today (lots of ways to engage talent, btw). Now is the time to start shouting to the press about all the cool shit we've been up to.
It's a lot easier to be the tallest person when everyone else sits down.
Everything gets repriced in a recession. Whether it's the cost of talent, office space, advertising, or that one-off vendor that we would just as soon do without.
When everyone is fighting for talent, space and marketing attention, we set a baseline for how much it costs to run our business. But when the big giant red reset button gets pressed — we have to readjust. That means reevaluating and renegotiating every last cost to sync with the current environment, and by way of that, managing a new margin for our own business.
It's easy to solely focus on just the bad things happening when times get tight, but strategic Founders instead focus on how the changing battlefield can be used to their advantage.
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Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.