top of page

Axis Innovation Team | May 31, 2020

Axis Webinar #6 review: Crisis-time startup-scaling

6 WEBINAR V4.jpg

Since the coronavirus period began, we have been faced with a number of unprecedented challenges and considerations. One of the most important challenges which startups are dealing with now is that of budgets. Is it a time to spend and push hard for future growth or is it a time to cut back and wait? Axis Webinar #6 focused on just that and more. We heard from Igor Ryabenkiy — Founder and Managing Partner at AltaIR Capital, Gal Gitter — Managing Director at Ibex Investors, Sever Totia — Partner at 3TS Capital, as well as Anna Karnaukh — Project Manager Team Leader at MobiDev. So, what did we learn from our Axis Webinar: How to Scale Your Startup on a Covid-19 Budget?

We first heard from Anna, who discussed remote work and the fact that it is extremely important to adapt quickly to the new reality in which we are living, rather than lagging behind. She spoke of Mobidev, which is a software development company that offers outsourcing of certain tasks at such a time, which can allow the time to focus more on business and less on technical development — which is much needed during this stressful period.

Moving into budgets — we learnt that cutting costs is a necessary step at this time for most startups, according to our poll and our speakers. Outside funding, such as from the government as highlighted by Gal, must be used if it is available. After that, various cost cutting avenues need to be deeply considered. However — simply shedding expenses is not enough. Startups need to ensure that their existing revenue base is happy and is looked after, and need to focus on growth — even if the realisation of that growth will only come later on. Projects that will generate a return sooner rather than later should be prioritised and companies need to be ready to pounce when the market is fully active again.

While looking to thrive, searching for new revenue is always on the mind of a founder. But at a time like this, retaining existing revenue is as important as anything else. Finding ways to reach out to your client base now can go a long way: By asking how they are doing, reminding them that you are working hard to generate returns on investments, and offering solutions such as payment concessions, you are showing goodwill and locking in those who you already had. Both Sever and Gal gave several examples of how they are doing this with their portfolio companies to proactively contact their customers and offer additional services or value to them.

While retaining revenue, should companies still be looking to launch new products at this time? “You have to act in order to stay ahead”, according to Anna. The pandemic won’t last forever. Getting a PoC (proof of concept) out now, even if you do not yet have a complete and polished product, will allow a head-start on finding out whether you should spend more time on an idea and whether it has potential to grow — either soon or in the future. A sharp focus on resolving a problem of your end user will give you a chance to succeed with a product, even if now is not the perfect time for its release.

Having discussed funding, revenue retention and new products, an audience question came in regarding the topic of staying self-funded as a startup. The general consensus was that if you are showing good growth, then remaining bootstrapped is a good tactic. However, you need to look at what growth you might be sacrificing by not using external capital. If you do not spend on growth, you cannot be successful in the venture world. In addition, at a time of world lockdown, Sever noted that “if there is a demand pull in the market, look to accelerate forward beyond your competition”. It is a great time to try to take a leap ahead, and if external funding is needed for that — then it should be seriously considered. Investors will be more focused on their portfolio companies than usual, and so the bar is higher in terms of attracting new investors. Therefore, approaching existing investors — if necessary — is likely to be a better strategy at the moment. If a startup is looking to raise funds and is showing excellent growth, then it is likely that it will still be able to find capital through whichever avenue it chooses.

So, at such a time, how can a startup find growth and make itself more ‘investible’? Getting your first 10 customers is always a massive step, according to Sever, especially if they align with your ROI and market strategy. On this point, Igor asserted that “if your value proposition is clear, you will find your customers”.

To bring this all together — it’s not a simple time for the venture world, but being selective, proactive and creative will clearly help a startup to scale, even on a crisis-size budget. Axis Webinars will keep coming your way soon!

Splashscreen webinar 6.jpg
bottom of page