Crisis Survival Kit: 15 Tips From Venture Capitalists
At a recent Silicon Valley event focusing on the economic crisis, famed venture capitalist John Doerr offered up 10 tips on ï¿¼How to manage your start-up in the downturn," but the advice is useful for any business owner.
At a recent Silicon Valley event focusing on the economic crisis, famed venture capitalist John Doerr offered up 10 tips on ï¿¼How to manage your start-up in the downturn," but the advice is useful for any business owner.At the VentureBeat event Kleiner Perkinsï¿¼ Doerr, pulled together this list from companies he funds:
1. Act now. Act with speed. Raise money. Get a loan, secure financing. Focus, cut or sell.
2. Protect the vital core of the business. But use a scalpel not an ax. Be surgical. Protect the vital core of the company. Cut once, deeper than you think.
3. Make sure you have at least 18 months of cash. Or more ï¿¼ on a conservative revenue forecast.
4. Defer facility expansions. Donï¿¼t spend money on tech infrastructure, such as new software or computers.
5. Reevaluate your R&D priorities.
6. Renegotiate any contracts that you can. Everything is negotiable.
7. Remember, everyone in the organization should be selling, from the receptionist to the engineers.
8. Offer people equity instead of cash e.g. in place of bonuses. (You can do this with outside vendors as well).
9. Secure your cash. Treasuries, or treasury backed securities, are more secure than money market funds.
10. For your revenue plan, develop and obsess on leading indicators ï¿¼ e.g. bookings, unique visitors, conversions.
11. Over-communicate with everyone ï¿¼ employees, investors, partners and particularly customers. Donï¿¼t sugar coat things, communicate your resolve.
But that's only the beginning. Angel investor Ron Conway chimed in with:
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.