In entrepreneurship, nothing goes as planned. No research or preparation can guarantee that a business will go as planned. This has never been truer than last year, as startups grapple with the impact of COVID-19 in addition to the ordinary challenges of starting a business.
At Wilbur Labs, my team and I recently interviewed 150 founders about why startups fail and found that 70% have faced business bankruptcy at some point. Of those who tried to pivot, 75% were successful. Bob Dylan got it right when he sang the times of change: “you better start swimming or you’ll sink like a rock.“Founders who are willing to adapt their plans have a better chance of preventing their business from going bankrupt.
That’s why I think adaptability is the most important quality in a founder. It is also a skill that anyone can develop and practice. I’ve seen first-hand how three specific tactics can help any founder adapt effectively.
1. Reframing challenges into opportunities
Businesses and their leaders are defined by how they respond to crises. When the founders look back on their experience, the “times of war” will stand out, not the days when everything went according to plan.
For me, that helps put all of this in perspective. Each challenge is a chance to set the course of the business and often brings unforeseen opportunities – even in the event of a pandemic.
A pandemic can seem difficult to start a business, unless we flip the script. Arguably, there have never been more problems that businesses can help solve.
My team and I are working on more new businesses than ever before and subjecting them to what we call the “COVID lens”. We map consumer behaviors for years, not just the short term, and seek out the opportunities created by new and growing challenges.
The spaces we looked at before the pandemic, such as medicare, real estate, and education, each present unique new challenges that are increasingly becoming opportunities due to COVID-19. Adaptable founders are more likely to look beyond the fog and spot such opportunities.
2. Focus on what you can control
When plans fail, it’s easy to get overwhelmed with the decision of what to do next. While some things are beyond the founder’s control, there are still key areas they can control, including how to prioritize and sort out next steps.
For this reason, there is nothing more tactically important than focusing on the elements and strategies most likely to have an impact.
When COVID-19 hit last spring, my team went into protection mode for our staff and our wallet. On the people side, we were able to ensure that our teams were as comfortable and productive as possible while working remotely. We gave each a $ 1,000 allowance for a workstation, and IT worked with them to plan and order the equipment they needed.
On the portfolio side, each company has focused its attention on the direct impact of COVID-19 or on critical growth opportunities. We cleared calendars and scheduled daily meetings with business leaders. We also threw out all of the annual OKRs and roadmaps.
KPIs and year-over-year metrics were no longer relevant, so we created new dashboards to track metrics that we could respond to and monitor more effectively.
For example, the travel industry saw a 50% drop in international travel in January 2020, as COVID-19 spread to Asia and Europe. The United States was clearly next. For our portfolio company VacationRenter, a vacation rental meta-search engine, the team has started tracking cancellations and booking nuances such as ‘check-in time’ – the time between booking a booking. ” travel and check-in – to better assess customer behavior and anticipate cancellations. or repayment trends.
By monitoring this new data, the team was able to quickly adjust product and marketing strategies, including the deployment of flexible cancellation filters and the expansion of socially remote travel options like RVs, which led them to generate over $ 1 billion in gross bookings in 2020.
3. Zoom out
In a few years, what is the likelihood that the founders will focus on the same issues they face today?
Sometimes founders faced with significant challenges find themselves trapped in short-term disaster. Their problems seem eternal and intractable rather than temporary and manageable.
By taking a broader perspective, we can give ourselves the openness and confidence to adapt. We can gain enough perspective to change one thing at a time rather than changing 100 things at a time driven by anxiety and uncertainty.
When I talk to potential founders, a question I always like to ask is whether they commit to working in the company for more than 5 years. In truth, it’s not a long time, and most large businesses take a lot longer to set up.
When you take a long-term view instead of a six-month plan, difficult situations seem less threatening and more navigable; the pandemic – and whatever disruption happens next – looks like a bump in the road instead of a collapsed bridge.
My co-founder Phil and I talk about a 50 year vision for Wilbur Labs. By thinking and planning for the long term, it’s infinitely easier to reframe challenges as opportunities and focus on what you can control. You can make steady progress without overreacting to the inevitable bumps along the way.
The only guarantee is to have to adapt
Challenges will continue to face every founder, and adaptability will separate sustainable companies from the pack. Founders who define opportunities as challenges, focus on what they can control, and zoom out will have an advantage.
Whatever challenge your startup faces, adaptability will improve the chances of survival.
Published March 18, 2021 – 10:26 UTC