In March 2020, around 2 weeks after Africa’s first Covid 19 case was confirmed by Egypt’s then Minister of Health and Population, Dr. Hala Zayed, an entrepreneurial dream blossomed in the suburb of an African city just about the size of Rwanda. Three friends in their early 20s pooled their savings into starting a fast-food joint in their neighbourhood, hoping to scale into a fast-food franchise in a few years.
They got rave reviews for the delicious product, and things looked promising, but as with all other startup founders, their resilience was tested. Weeks later, several Covid 19 cases were announced in their city and a lockdown followed. The cost of raw food materials skyrocketed, movement was restricted, and transportation was twice as expensive. The dream – like many others in Africa and beyond – died. Is the anything they could have done to salvage their dream? Maybe this would have helped, but let's find out.
Why Resilience is Key for Startup Founders
According to Failory, 90% of startups fail. Among startups that secure venture capital backing, the failure rate drops to 75%. As a startup founder, the odds are stacked against you, and staying functional – never mind successful – in an environment that continues to evolve is a struggle. Startup founders must acquire the necessary skills to combat the challenges plaguing startups, particularly in their first few years.
Startup Founders must be Efficient Managers
Beyond common detractors such as insufficient funding and misreading market demands, one of the biggest reasons startup dreams die is poor management. According to LevelEleven, companies that spend over 50% of their sales budget on management training outperform their goals by 15%. Focusing on management can make a significant difference, so here are a few steps that will help build a more resilient business.
Step 1 - Modularity: this approach, known as business operational segmentation, involves dividing the overall business operations into smaller, self-sustaining units that work together harmoniously to achieve the company's overarching goals. By doing so, it becomes easier to identify and resolve issues without causing widespread disruption to the entire operation.
Step 2 - Adaptability: this is the ability to change and improve through trying new things. It needs a variety of ideas, which are tested by experimenting. Then, the best ideas are chosen and upscaled. According to a study by IBM, companies that are more adaptable are more likely to achieve higher revenue growth and profitability. Adaptive organizations are designed to be flexible and learn (read resilient), instead of staying the same and doing things the same way.
Step 3 - Crisis Management: simply put, startup founders need to plan for the worst. As we have already discussed, terrible things happen in business; economies flounder, policies change, and the market evolves... resilience is being ready for the least desirable outcome. According to ReputationManagement, 59% of businesses have experienced a crisis, but only 54% have a plan to deal with them. Dear startup founder, chances are there is a crisis coming, so be sure to be part of that 54%.
Step4 - Alignment to Systems: your startup is part of a bigger system, such as the economy, a supply chain, and most importantly, a society. It is important to make sure that your goals fit these systems. For instance, what critical issue does your startup solve in your immediate society? The answer to that question determines how long your startup will survive.
Step 5 - Invest in the Right Technology: nothing beats software that caters to your needs, it is every startup founder’s dream. Do your research and identify what the gaps in your processes are and find a tool that closes as many of those gaps as possible. As a rule of thumb, the fewer tools you use to address your needs, the better (it is cost-effective and efficient). While you are at it, look up SpurtX! tools, an all in one digital platform that helps you build a motivated and efficient workforce.
If you need help getting your management act together, ASAP by Sync! 2.0 is the perfect opportunity for you. The first cohort helped 20 startup founders level up their management skills, and you can sign up for the second cohort here.
