Thriving in Crisis: what large companies can learn from startups about agility
Agility is a required trait for startups who are constantly navigating uncertainty. And, recent tectonic shifts have escalated uncertainty to a new levels — not just for startups but for established firms, too. What must leaders do to ensure their firms not just survive but begin to thrive during this period of rapid change?
A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty. -Eric Ries, The Lean Startup
To help answer this question, I scanned the landscape to understand how the most nimble entrepreneurs were creating new value for their ventures. Below I will outline a framework for thinking about how to create new sources of revenue in this dynamic environment and outline four specific models for leaders at startups and large firms to consider as they chart the path forward for their organization.
For some lucky startups, the pandemic has been a catalyst for their growth. Startups in the areas of remote healthcare and last mile logistics have had gasoline thrown on their fire. While other businesses were not so lucky and have been negatively affected by the behavior shifts that occurred as a result of the global pandemic. If you customers no longer have the same needs you were once addressing or perhaps you are no longer able to reach them through the same channels, then it’s likely time to look for new sources of revenue, which could include changes to the solution you are delivering, the customer you are serving, or how you are reaching your current customers with your solutions.
There are four models we’ll consider.
(1) Change your solution to serve a new need of your same customer.
(2) Take your same solution/product and serve a new customer.
(3) Shift your assets to serve a new market with a new solution.
(4) Find a new way to reach your same customer with your existing solution.
Let’s look to a few examples for inspiration.
Everlywell, an Austin-based medical diagnostics provider, makes more than 30 at-home health test kits. When existing actors were not able to quickly resolve the need for covid-19 testing, they launched into action to identify a test. They developed a test in just 13 days. While they have not get been granted permission by the FDA to sell the test for at-home use, their tests are being used on front line workers, and their end goal remains to serve their original customers with a new product offering.
Other startups have opportunities emerge for their product to serve new customers. BookNook is an education technology company that allows students to read aloud to a guide or peer. The BookNook platform provides tools that walk the guides through scoring and assessing the reading as the student reads. BookNook sells directly to school systems and after school programs. With covid-19 sending students into a virtual learning model, BookNook saw an opportunity to begin to also provide parents-turned-teachers with their tool. This cloud-based solution is a perfect fit for parents looking to supplement their children’s at home learning. This is a great example of serving a new customer — whose needs quickly became acute — with an existing product.
GoNanny is a startup that was part of the Techstars Chicago 2020 cohort. They had built a platform that allowed parents to schedule childcare providers to handle transportation of their children. Think about this: if you are a parent of an eight year old, you aren’t likely to schedule a random Uber driver to pick up your kid and drop them off at their soccer practice. But, who do you trust? You trust childcare professionals who are already trained and equipped to safely work with children. And who is interested in earning more money? Childcare professionals. GoNanny was establishing traction, and then daycares were closed, after school activities were halted, and we entered the Great Pause. So, they reflected on their assets — they had built a strong logistics platform. Who now needed the quick implementation of a logistics platform? Restaurants that needed to shift to delivery but had not yet signed up for DoorDash or UberEats , which in Chicago was primarily high-end restaurants. And who needed jobs? The wait-staff at these same establishments. A match was made and GoNanny quickly begin leveraging their existing asset — the logistics platform — to serve a new set of customers — high end restaurants.
Let’s look at a second example that’s not a startup, but rather a small business in Texas. AK Wet Works owns high pressure equipment that was used for cleaning industrial equipment in the oil and gas industry. As covid hit and oil prices simultaneously tanked, AK Wet Works needed to think fast. How could they use the assets they had to meet a real and immediate need? They worked with a sanitizer solution provider to create a solution that would work in their equipment. They now have the ability to quickly disinfect large scale surfaces, like playground equipment, in minutes.
With both GoNanny and AK Wet Works, they leveraged their existing assets — in the case of GoNanny their logistics platform and in the case of AK Wet Works their specialized equipment — to create a new solution for a new customer.
For some startups, their customers are still saddled with the same pain points, but social distancing and the implementation of stay-at-home orders has restricted how they can reach and interact with their customers. Let’s look at Fixer, a startup that trains under represented individuals, particularly women, for careers in construction trades, e.g. electricians, plumbers, etc. As a home owner, you book basic repair services through the platform and their trained “fixers” will service your repair. However, as we’ve become more cautious about people entering our home, Fixer considered an alternative way of providing a similar product to their same customers using a different channel. You can book a fixer to walk you through and consult on your do-it-yourself project. Want to replace your garbage disposal? You schedule an appointment with Fixer, turn on your video at the appointed time, and work together with the fixer to handle you own repairs. What I love most about this switch, is that it may open a revenue line that remains long after life returns to normal. Additionally, the modification to their model has allowed them to enter new geographic markets across the country since the fixers don’t need to be in the same physical location as the repair.
Copper Cow Coffee is a startup that brings high quality Vietnamese coffee straight to your cup. Prior to the pandemic they were growing rapidly by selling to offices who wanted to offer their employees and visitors a unique coffee option. As offices closed and everyone migrated to work-from-home, Copper Cow Coffee had to make a quick transition to focus on their direct-to-the-coffee-drinker sales. They ramped up their online sales option, and it turns out that when we are stuck at home trying to be employee, educator, and parent that we want some variety in our caffeine consumption.
Both Fixer and Copper Cow Coffee are great example of taking your existing solution and with a small modification serving your same customers but through a different channel — online instead of in person.
After seeking inspiration from how startups have rapidly responded to shifts in their customers and markets, I suggest business leaders asking the following questions:
- How can we reach our current customers through different channels?
- What new needs do our current customers have that we could address?
- Are there new customers that now need our solution?
- What assets, both physical and human, could be deployed to address a pressing problem?