The global economy and its impact on startups in the time of COVID 19

Fabrice Grinda writes about how the global economy and how it impacts startups in this time of COVID-19.

Find and read the full article here: https://fabricegrinda.com/the-global-economy-and-its-impact-on-startups-in-the-time-of-covid-19/

Grinda gives three general recommendations about what startups should do

1. Raise a bit more than you need

2. Focus on your unit economics

3. Control your burn

More specifically he recommends startups in this current time to

1. Expect your revenues will decline

Many businesses are essentially shut down right now given both supply chain disruptions and worker quarantines. Even if you could serve your customers, they would probably curtail their spending. At the same time if you are sales driven, you should not expect to be able to meet and close new deals for months. Even deals you were convinced were going to close will at least be delayed if not outright cancelled. 

2. Delay hiring and investing until it hurts

It’s a good rule of thumb for startups to delay hiring until it hurts and to remain very cash conscious, but even more so in these times. It’s also worth revisiting capital spending plans to make sure they are appropriate considering the current environment. 

3. Cut costs

It going to hurt, but it’s a good time to trim all expenses. It’s the perfect time to try to increase productivity and do more with less. 

Find and read the full article here:

https://fabricegrinda.com/the-global-economy-and-its-impact-on-startups-in-the-time-of-covid-19/

“Fabrice Grinda is among the world’s leading Internet entrepreneurs and investors. He has over 150 exits on 500 angel investments. Fabrice has served as CEO for three multinational companies and has an impressive track record as an early investor in Alibaba, Flexport, Zume Pizza, Delivery Hero, Betterment and Brightroll. Fabrice is currently running the startup studio and venture fund FJ Labs, which he cofounded with business partner Jose Marin. Fabrice was named the #1 Angel Investor in the world by Forbes“