Andrew Chung on How Startups Should Adapt to COVID-19

Due to the coronavirus pandemic, there has been a drop in startups which has reduced employment opportunities across a variety of industries. Many businesses have been forced into budget cuts and employee furloughs because of the harsh economic times. After a virtual portfolio meeting with several company CEOs to discuss COVID-19 challenges, Andrew Chung, founder of 1955 Capital, provided the following takeaways for how startups can adapt to this new reality.

Runway Planning

Businesses will be forced to make tough decisions regarding budgeting during this time. The success of any startup relies on how well leaders steer their businesses toward success. CEOs must think creatively when making budgeting decisions, including more upfront cash payments, cost-sharing, and other financial support.

Level the Playing Field

Startups have an opportunity to catch up with established companies during this period if they implement appropriate strategies. The pandemic has leveled the playing field by allowing each business to work out recovery. They need to rethink their target markets and reprioritize their development efforts in gaining a market share. For example, startups that produce products for multiple market applications can start by targeting those sectors that are resilient to the coronavirus pandemic. This means businesses can renew their product matrix and shift focus from the most affected sectors to the least affected.

Rethink Approaches to Fundraising

Fundraising can be challenging for startups during this time because most investors would prefer working with existing companies as opposed to startups. This is due to the uncertainties of whether the business will thrive. Startups need to prioritize capital pockets that are active during the crisis. For example, they may have to rely on funding from people they know and can trust. CEOs must convince investors that they can perform due diligence and assure return on investment.

Adopt a Global Perspective

During this time of uncertainty, there are more opportunities for startups that introduce radical innovations, which can be useful on a worldwide scale. As governments seek to restore growth and repair their economies, businesses should be thinking toward a global perspective, such as sourcing from the Asian market.

Importance of Team Morale in Remote Work Environments

Startups need to adopt a proactive approach that improves team morale to survive. According to 1955 Capital, it is more crucial than ever for startups to focus on team building. This means CEOs should cultivate a team culture between suppliers, partners, and employees alike. Every stakeholder should be brought on board and know a business’ priorities and be involved in planning initiatives.

Conclusion

Startups play a vital role in the economy, but the coronavirus crisis reduces their creation and challenges their survival. Andrew Chung provides a perspective into surviving in the unique environment of COVID-19. Businesses should focus on driving revenue and growth, even during slowed economic growth. They should be forward-thinking and focused on the best way to enhance their competitiveness in a post-COVID business world.

Founder of 1955 Capital, Inventing a New Global Future | ClimateTech Venture Capitalist based in San Francisco, CA | Learn More: https://andrewchung.com/

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