Graduate Law School, Move to Chicago, Quarantine — Starting my Career during a Financial and Health Crisis
Hearing stories about the 2000 & 2008 recessions are always interesting but seem like the telling of a legend. Sure, I lived through both, but I was 6 and 14 years old respectively. I never felt the impact of a financial downturn in a professional capacity. After my 6 days at a boutique startup law firm and less than two months at an early stage venture firm, here is what I’ve learned so far.
(1) Take care of your people.
I am worried about my parents, grandparents, family, and friends that may be at risk of the virus, but I can’t help if I can’t pay my rent or other bills. Especially being right of law school where my student loans outnumber my checking account by about 15x, questioning whether I will have a paycheck along with flexibility to help family and friends was my #1 stresser.
I got an email from my boss outlining a few internal policies and updates regarding the COVID-19 crisis. A few of these updates included (i) we do not anticipate the need to reduce the number of team member; (ii) we are all free to work from home every day; (iii) if you experience hardships in your personal life your work schedule can be as flexible as needed; and (iv) if you need to take time off, do it.
Receiving this email immediately deflated my stress levels. Now not only am I able to focus on work without the worry of being let go, I have more determination to work as much and as hard as I can for the firm knowing they have my back.
Take care of your people. Not only employees, but also customers, partners, suppliers, or others in your community. If the satisfaction of being a good boss/partner/community member isn’t enough, just imagine how well your customer and employee retention rates will be if you do the right thing and take care of your people. This is a must (and hopefully being a good person is enough).
(2) Optimize your business and determine your financial outlook.
Taking care of your people is hard when you are bankrupt. I do not imagine anyone had a line item for COVID-19 in the pro-forma, so the next step is assessing the impact to your financials and ability to maintain your business. Run additional scenarios accounting for the impact of this virus to last 3 months, 6 months, and a year. We’d all love for this to be over in 3 weeks, but hope is never a plan. The cliche “hope for the best but plan for the worst” is so relevant here.
After re-tooling the financial projections, reach out to core clients as well as any customer substantially impacted by the virus and economic decline. Offering support is helpful as mentioned above, but you also need to determine your exposure. After running some models to determine what the business needs to remain viable, incorporate feedback from your customers and anticipated revenue.
Financial projections are extremely frustrating because circumstances constantly change leaving projections almost always incorrect. That’s not the purpose of these models. The value comes in identifying different scenarios and constantly updating the model as you receive more information. Use the model as a tool to make informed decisions during uncertain times rather than a one-time pdf to send to investors.
Lastly, trust yourself. No one knows your business better than you. Collect as much information as you can, treat people well, listen to advisors, and do what you think is best. Don’t second guess yourself, just keep moving forward.
(3) Perspective is everything; don’t slow down.
The social and economic impact of COVID-19 sucks. I’m not even going to try to use a more proper or academic term for it. This sucks.
However, there will be winners that emerge from this crisis, but it requires the right mindset. In a world where relationships and brand is everything, you have the opportunity to show your support and willingness to help. Do it. Be a good person and make someone’s life better.
Further, this is a reset on one of the longest bull markets we have seen, if not the longest. The markets have seen some of the largest drops in history, but a friend of mine trading commodities options is absolutely crushing it right now. High volatility in the market creates opportunity.
This is true whether you are investing in open markets or running a business, particularly for startups. Incumbent players in most markets will be hurting. There will be lay-offs and lost market share through an inability to adapt to customer needs during difficult times due to large overhead and complex hierarchies. Human capital will become available at lower prices, flat organizational structures allow startups to adapt more quickly, and strategic funding with eager VCs excited about plummeting valuations can offer capital to offset short-term losses as you scale.
Times are tough right now. But there is opportunity to make history as we overcome the crisis. The saying “never let a good crisis go to waste” seems very narcissistic, but objectively speaking there is truth to it. Stay positive and keep moving forward.
