How businesses found themselves in a startup situation

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IVAN KORAKIN

Financier, Strategic Advisor, Coach

In the last 35 years, we have already seen seven crises of different sizes, starting with the Chernobyl accident. At the same time, the smallest difference between them was 3 years, and the largest – 6 years. That is, stress and uncertainty are more a habit for us than an accident.

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The current crisis is the eighth. Its specialty was life-threatening – survival, it is on a global scale, and we, and not only our children, learned on ourselves what quarantine is. Entire industries are closed or restricted, labor organizations have changed dramatically. Also, in the positive sector, banks operate normally.

Population and occupation expectations are negative. The survey revealed that 57% of private respondents have a wealth of funds for up to 4 weeks, and 79% of entrepreneurs expect sales to decline. Business ideas are full of pessimism: “Everything is very bad”, “Nothing is clear”, “There is no money and never will be”, “It was necessary to save money”, “They did the wrong thing” “. Corporate defaults and a default crisis are expected.

What do we know for sure? It seems that a default is not expected: Parliament with a squeal passes the necessary laws and even talks are underway with the IMF to double the lending program. The government’s redrawn baseline scenario assumes a 4.8% drop in GDP (3.7% of the earlier increase planned), inflation will rise to 11.6%, a rate of 29.5 UAH at the end of the year. For $ 1, and an average salary of 11 thousand UAH. There is also a pessimistic scenario: a 9% economy collapse and a devaluation of up to 35 UAH. For $ 1.

In an epidemic, developed countries will pump up the economy with money and provide all kinds of delays and benefits. This method showed its effectiveness during the 2008–2009 crisis. The leader is Germany, allocating 1.3 trillion euros (37% of GDP) and the United States with $ 2.6 trillion to save the economy. (12% of GDP). Underdeveloped economies have no such monetary reserve, therefore, in the best case, devaluations and loans will be provided.

Who is to blame for what happened? Everyone is to blame, because they hastily believed that “man is the lord of nature.” We have already moved to other planets without putting things on our own. It turns out that we also know ourselves poorly and how to protect and strengthen our immunity is clear of habitat degradation, although in previous years only Greta Tunberg was concerned about this.

Economic “bubbles” were inflated, where many people engaged in secondary, unnecessary and often hazardous production for the environment, goods, and services. And it is not surprising that some of them lost their value immediately, as no one has canceled the Maslow Pyramid with its hierarchy of requirements.

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Before the crisis, we talked in every way about the inhumanization of economic relations, the inevitable leading role of artificial intelligence and so many people would lose their jobs. At the same time, no one discussed, but what will these people do – can it only be consumed? And we see that now the main burden falls on the shoulders of doctors, nurses, drivers, vendors, couriers and not robots.

We all unanimously underestimated the role of money – as it used to be in the old days. We are interested in the mining of mythical virtual units, spending considerable real non-renewable resources for this. We have not yet adopted the concept of sustainability, where a business takes into account not only one P (profit), but three other P – principles, planets, people.

What to do? First, to learn the lesson. As the existential crisis has erupted, we just have to return to basics and strategy. What is the meaning of our work, what values ​​do we hold, what is the long term effect of it?

It is now fair to say that many businesses found themselves in a startup situation when there was no money. It is like a computer game – to fall before the tenth level. Remember how many of you told fascinating stories about how they started their business in one garage or three nightstands. Now this is the situation.
But there is a difference from classic startups, because there are teams, customers (even without money), products (still old), infrastructure and experience. And there is uncertainty in which the simile of motion in fog can help. I call this the “five step” method. The main thing is to know the general direction without even looking at the target, and take small, but small steps.

Namely, in an era of turmoil, the main thing is not money, but meaning, and it makes us relate to a time when money has not spoiled us yet. Therefore, let’s consider the unknown not as a threat, but as a possibility of change.

Immediate action plan of any business under the present circumstances:

  1. Hold a strategic session. It is a form of teamwork, aimed at joint development of strategically important solutions.
  2. Create a new business model.
  3. Create / update financial model. Planning for production of goods or services and classic reports – P / L, B / S, C / F.
  4. Communicate the results to the rest of the team and employees.

There can be no universal consonant here, as the case of each company is different. Someone has stopped without the ability to continue working, one can work remotely, and one cannot withstand the increased operating load. For example, a service for video conferencing Zoom reported that the number of daily users was 200 million in March 2020, while the maximum number of users per day was 10 million in December 2019.
We will become mature and intelligent active optimists, because we have 3 to 6 years of relief before the next crisis.


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