University of Toledo experts offer their advice on priorities, mentality, and opportunity in the wake of a pandemic
In the midst of a pandemic, entrepreneurs have questions. Unfortunately, those questions don’t always come with easy answers. When will we be back to normal? Can I still find funding for my idea? How does my marketing strategy need to change?
To answer some of these questions and look toward how startups have changed permanently, we spoke to the University of Toledo’s Norman Rapino, Executive Director of the Center for Innovation, Kristen Shinaver, Marketing Manager for Launchpad Incubation, and Brian Genide, Director of Venture Development and Incubation.
Here are their thoughts, tips, and suggestions on how startups can grapple with the new normal:
It’s OK to not know everything
“The entrepreneurs that I deal with are all very intelligent, but they’re also confused,” said Genide. “And we’re all living in a time of uncertainty — we don’t know what’s to come. We’re watching history unfold. But they’re also optimistic. They’re entrepreneurs and they’re looking for ways to come out of this stronger.”
Fill in Your Gaps
“In hard times, you have to do more of the things you don’t do well,” said Rapino. “Businesses succeed in good times because they can cover up blank spots — the things they don’t do well — with sales and revenue. But when sales and revenue are challenged, you need to emphasize what you aren’t good at.
“Most business owners are good at four or five things and don’t pay attention to three or four things — those things are why they fail. Good times hide all that, bad times don’t. So now, you must focus on your weaknesses and overcome them because your competition will be doing the same. To overcome your weaknesses, you should honestly identify them and get input from people outside your venture who have the expertise you are missing.
“If you do not have a board of advisors, this is a perfect time to form one. Choose its members based on their specific expertise, as it relates to the gaps in your own set. And don’t shy away from paying for specific input. If you always seem to have cash flow issues, find someone who has experience as a CFO, not just someone who can help with bookkeeping. If you cannot seem to make good choices as you hire people, find someone who has relevant HR experience in your industry. Don’t make the mistake of thinking you can do it all yourself.”
“You can’t survive in a race to the bottom price,” said Rapino. “You have to understand your customers and deliver better and more effectively than your competition. You have to know more about your customers because you cannot afford to not learn anything about them. You must cherish the ones you have and gain more from your competition and you must do it while being able to get the right message out. You cannot afford to waste money on poor messaging.
“To do this correctly, schedule a regular time with your customers and ask them how you are meeting their needs. Don’t just talk about price but ask how your offering fits into what they do with it. Ask about what problems (and opportunities!) they have with their own customers and try to learn how you can make their sales process go more smoothly and profitably. You need to be more of a partner than just a supplier.
Spending to engage customers may not be worth it
“As an example of good outreach, think of a daily press conference,” Shinaver said. “Every day it’s consistent — people know you’re going to come on at a certain time. You want to establish that kind of consistent messaging and being available to your clients if they have questions. There are so many free resources you can take advantage of, social media being the big one, and you should use these resources to create a strategy for communication with your customers.
“People are scared. They have no idea what’s going on. If you can alleviate a little of that uncertainty with what is happening with your company by giving people updates, you’re going to build brand advocates during a time of crisis by giving people something to look forward to.”
Your business is not the only thing changing
“Your customers have changed,” said Rapino. “Now, everyone is in a lifeboat sort of mentality. What your customers did before is not necessarily what they will do moving forward. You want to understand what your customers are doing now as opposed to what they were doing before the pandemic. Because your customers must adapt, you really need to understand how your customer makes money to be able to fit into your customer’s cost and revenue model. You must add value in one way or another.
“Once again, communication is key here. Talk to your customers as often as you can and ask how they are coping with the pandemic. Learn what their specific problems are and see if you can find a way to lessen their burden without adding too much to your own. For example, if you have been making regular product deliveries that seem to fit a 60-day inventory cycle for your customers, find out if they would like a more timely delivery schedule so they have less cash tied up in these stressful times.”
Don’t put all your eggs in one basket
“We’re seeing a lot of people want to start companies just to provide solutions to COVID-19 and not provide anything other than that,” said Genide. “It’s the idea of building something, jumping in quickly and making money fast. Meanwhile, we’ve also seen others go away from their main focus to go after a different COVID-related idea.
“Flexibility is key right now. Business owners need to be flexible and be able to pivot on a dime, not going all-in on one idea. People that have that mentality are constantly evaluating their market to make sure they stay up with the times and are offering a value-added service or product that helps maintain longevity.
“For example, this may be an opportunity for early-stage businesses that have a technology focused on novel sterile technologies to capitalize on sharing the importance of their product to reduce the spread of harmful bacteria and viruses. Additionally, we have also seen companies with existing filtering technologies modify their design to address the needs of our frontline healthcare workers as they work to prevent respiratory contagions from spreading.”
Focus on your brand messaging
“The pandemic should have focused the marketing plan you have for your business,” said Shinaver. “Are you focused on transparency and honesty? Is that going to pull through and continue during a time when you’re showing what you’re worth and whether you’re an asset for your market?”
“Now, it’s about being smart with your marketing. It’s not about taking and absorbing other messaging that you see out there, it’s creating your own unique content that is strictly targeted toward your audience and relatable to your business. You want to be specific and deliberate with the information that you deliver to your audience.
Accept the new reality
“A year from now, business will be done in a different way,” said Rapino. “We’re not going to go back to the way it was. You have to figure out what is going to change in your particular business area after this is over. If you think we’re going back to where we were, you’re going to be in a lot of trouble. You need to understand how your customers are going to be living, what they’ll be doing and how they’ll be making money a year or two years for now.
For instance, if you’re selling to government entities, many of them are going to have trillions of dollars in debt coming out of the pandemic. The normal channels you have may be closing off because people are doing without or with less. You really have to understand their new realities.”
Funding is still out there
“For companies that are past the startup stage, every funding round that I’m seeing is a down round,” said Rapino. “People who are raising money now are living in a reduced funding environment, so investors understand that they can get more value for their money because there are so many opportunities right now.”
“So while we’ve seen a few big companies that are raising 30 to 40 percent less than expected, those funds still have money and are looking for new technology they see as a bargain,” added Genide. “We know there’s still great tech out there.”