Keep Calm: You’re going to CRASH & BURN
As startups in India die, there’s little experience among investors, mentors, or founders to manage and convert a messy exit into a less messy outcome.
If you’re a founder facing desperate times, and the looming prospect of shutting down, here’re a few things you should do to achieve a less bumpy landing instead of a hard crash & burn.
- Find a buddy who has been through this before, preferably less than a year ago. This person will help you keep an even keel through your tough times. Setup a cadence of calls, every two-three days to manage your emotions in this journey.
- Books to keep you company in this journey. Pull a rabbit out of your ***: The Hard thing about Hard things. What to do when there’s nothing left: Failing to Succeed. Note, most startups fail well before this level.
- You will need 30–60 days to run this process well. Go lean, give yourself the runway. Be open and let everyone in your team work on the same plan towards the same goal.
- Identify the strengths and weaknesses of your team. If you’ve done B2C products together, highlight that, if you’ve done a SaaS marketing product speak to that, if you’ve built a logistics delivery team from scratch, write about it. Even the act of building a team and doing 10 orders a day is something that 99.999% of people CANNOT do from scratch!
- Assemble a single page ‘group bio’ that positions your team as an asset. Position what you’ve done above on an individual basis.
- Identify what you’ve done before in 140char or less: Built 20 member logistics team from scratch. Built platform for computer vision. Built SaaS product for marketers.
- Make a list of companies that would want to do, in the next 6m-12m, what you identified in #5. Make this a LONG list. Funded startups (Series-B and beyond), big corporates, MNCs, any and every entity you can think of. This list should be 50–75 companies. Identify segments and order by segment, for instance: Ecommerce, Logistics, Shipping, Drop-shipping, Ecommerce tools, etc. for a ecommerce startup.
- Reactivate your personal network of supporters — yours & your teams. Don’t forget your team has a wide network too! You should find a core group of 20–30 strong supporters who are well connected into your target industries.
- Reach out to this network, explain your situation, explain what your capabilities are, and what you can do for someone. Ask for senior - CxO, VP+, board level, VC, angel investor, connects, in the target companies. Craft a personalised email to each supporter, for each target. Talk about what you can do for them, based on what you’ve done in the past. Be very specific at the top, but show you’re open for more at the end.
- This is the hardest part. Work the funnel. Keep your team motivated. Keep reaching out, keep moving the ball along. Don’t be greedy, look for a fair outcome for you and the acquirer. This will take you 30–60 days, or even more.
- If you’ve done all this well, AND you’re lucky, you might get your whole team placed into a different company. Alternately you might find one company wants your devs, another your PMs. Do what it takes, make it happen. Get everyone a soft landing.
- Depending on how you play it, this might be called an acqui-hire. You might even hit the press. Depending on who’s speculating, you might even see some wild numbers thrown around in the press that you wish were true ;).
Too many founders push too far when they should be thinking of Plan B. Even a bumpy landing can set you up for a better shot in your next startup.
You will be in a very dark place when you have to shutdown your startup. And the odds are you’re going to fall, and fall again, and fall again. Like in Judo, falling safely is key to getting up stronger.
Just remember.
It’s not failing if you fall.
You fail only when you don’t get up again.