Starting Up In A Pandemic: Survival Tips From Newbies

An economy pummeled by a global pandemic: That's not the preferred environment most entrepreneurs would choose to launch their companies. Still, it's the one that startup founders have found themselves facing in the last year. How have they coped? In most cases, it's meant making drastic changes in delivery methods, product suppliers -- and everything in between.

Delivery Changes

For some founders, the biggest adjustments they've had to make have involved the delivery of their product or service. Last year, for example, Carly Potock and Charlene Tassinari -- at the time, colleagues at Google -- started discussing co-founding a video marketing consultancy for small-to-medium-sized businesses. They ended up pulling the trigger last March, launching San Francisco-based Canvas+Co. just days before the city shut down. After a week or so, it became painfully clear that the core of their business plan -- to provide day-long, in-person workshops -- wouldn't work in the new environment.

Going virtual, they figured, was the only alternative. The partners changed their in-person plan to holding "master video classes" with teams of clients. They adapted the curriculum somewhat, making the sessions shorter, since they felt that online meetings tended to invite more distractions. "We had to adjust for typical attention spans on video," says Potock.

Sales and Marketing Changes

Potock and Tassinari also had to adjust their sales and marketing model. The original idea had been to build a pipeline of prospective clients via keynote speaking events. But with the opportunities for making frequent, attention-grabbing speeches reduced to just about zero, they took a radically different tack: relying on the extensive network they'd built over their careers. That meant turning to their most-trusted contacts for introductions to others, many of whom freely offered advice and helped with brainstorming ideas. Total number of contacts made: 50 to 100, estimates Tassinari.

The process also led to clients they hadn't originally considered as prospects. For example, through their networking, they got connected to several private equity and venture capital firms overseeing brand portfolios. The partners then held one-hour video master classes for all the companies in a particular portfolio, focusing on ways to grow, innovate and change their messaging. Ultimately, a few of those enterprises went on to become customers.

Tom Dempster, who launched True Boost Digital, a digital marketing company, in the fall of 2019, also found his sales strategy implode after COVID-19 hit. The Hamptonville, NC enterprise's co-founder spent from September to February focused on developing relationships with local small businesses. The next step, planned for March and April, was to meet with as many of them as possible and turn them into paying clients.

Obviously, that blueprint fell apart. Not only were many potential customers struggling to survive, but even meeting them wasn't possible. In response, Dempster instead focused on clients he'd already started working with, teaching them to use social media to keep customers informed about store hours and other changes, and "helping them ride out the storm," he says.

Supply Chain Changes

In some cases, supply chain interruptions have affected the core of a startup's business, by blocking access to the very products they wanted to sell.

Take Calvin Harris. In March, he launched his Atlanta-based Reveille Trading Company, a website allowing small coffee farmers in Brazil and Peru to create their own brands and sell directly to consumers. But when those countries shut down and farmers couldn't get their beans out, Harris was suddenly left with no product for his platform. He ended up reaching out to a coffee distributor in California that let him sell some of its brew under his own brand name. Then, after public attention turned to Black Lives Matter protests and supporting Black-owned businesses, demand suddenly mushroomed and that distributor couldn't supply enough coffee. So Harris found another one in New Jersey able to provide more coffee.

The experience also inspired Harris to purchase a roaster himself. "I realize if we're going to be in this industry, we need plan a, b, and c," he says. "We don't know what the next thing to happen will be and I want to be prepared if something else unexpected comes up."

Funding Changes

Some entrepreneurs have been lucky: ViJay Koduri was able to officially launch Sizzle.gg, a platform that uses artificial intelligence to create highlights of live streams of video gaming, pretty much as planned this past June -- thanks to money raised a seed-stage round in the fall of 2019. For founders not as fortunate to have locked in funding, new money may be hard to come by: Seed capital, the first significant source of cash for fledglings, has declined by about 22% globally since January, according to an analysis by market-intelligence firm CB Insights.

But it's not all bleak. "Startups may have lost funding from big investors, but they're finding other sources of support," says Courtney Khoshafian, an advisor to startups and director of Los Angeles' Female Founder School. Case in point: In February, Kt McBratney co-founded OwnTrail, a Seattle-based platform that allows women to form connections and provide advice to each other. At that time, she was in the early stages of raising a seed round from angels and VCs. The coronavirus put the kibosh on that effort, so she decided to raise a much smaller round -- about a third of the original financial target -- from friends and family.

The result was a much leaner business, with fewer resources that necessitated a close, frequent examination of financial models. It's meant lower salaries for the co-founders and a different approach to developing the platform with fewer programmers. Developers assumed more of a minimum viable product (MVP) approach, in which they added a few features, checking in to see how things were going, and then course-correcting before going to the next step.

Operational Changes

There are, of course, some founders who discovered the pandemic was the perfect time to start up. Koduri, for example, launched his gaming platform just as video game play exploded, thanks to all the people sheltering at home. Media exposure led to discussions with gaming tournament organizers about paying the company to create highlights of their events.

Even so, he's had to adjust. He and his two co-founders originally planned to operate out of offices in Santa Clara, holding twice-a-week calls with a team of eight developers in Bangalore. When everyone had to start working remotely, that schedule proved not to be up to the many technical complexities they encountered. So they switched to a daily one-to-one-and-a-half-hour meeting, held in the morning for the folks in California and at night for those in India.

Relishing the Challenge

So, have any of these new businss owners had second thoughts? "If we'd known what was coming, we probably wouldn't have left our jobs," Canvas+Co's Tassinari admits. Still, she's glad they launched the company when they did -- and even relishes some of the curves the pandemic has thrown them. "It's made us spread our wings in ways we wouldn't have done otherwise."

The transition's not an easy one. But then, people with the entrepreneurial spirit rarely choose the easy path, and negotiating roadblocks is part of their nature. Take advisor Courtney Khoshafian, who co-founded The La Canada Cheese Shop in L.A. earlier this year. Her original intention was to create a cozy shop selling gourmet cheese, charcuterie, and other munchies. But when stores had to close, she turned the enterprise into a home delivery service and stationed herself in a commercial kitchen. "When you're working on a startup, it's your baby and you put all your time and energy into it," she says. "I was determined to find a way to make it work."