Global disruption from the COVID-19 pandemic has contributed to a sudden economic downturn that has changed the face of business for the foreseeable future. Navigating these difficult times can be greatly helped by looking to insights from thought leaders who have experience with similar situations in the past. To help our readers in this pursuit, we’ve taken some time to overview ideas coming out of Shasta Ventures, a leading venture capital. The company’s roster of experienced leaders and team members have been working diligently to provide the benefit of their professional history to the wider economic community. Read on for a look at the state of that economy and some of their thoughts on the matter.
Before diving into the company’s thinking on current economic concerns, let’s look at the history of Shasta Ventures and how it has established itself as a prominent early-stage venture capital firm. Founded in 2004, the company has long prioritized working with entrepreneurs who are committed, agile, and innovative. These characteristics were already considered an asset when the economy was booming, allowing startup leaders to adapt to ever-evolving customer needs, but they are now in even higher demand as many companies are having to fundamentally reevaluate the ways in which they do business.
Since its creation, the venture capital firm’s model has been one of support and partnership between itself and the entrepreneurs with which it works. With a deep pool of experience to draw upon, the firm seeks to provide guidance to startups that allows them to chart their own course in a manner that makes sense to their overall mission. In practice, this entails a well-tuned mix of financial and logistical support that rests on a foundation of clear and open communication. This philosophy is proving its worth in the current economic situation where, in many ways, resiliency is more important than ever.
Larger Tech Outlook
While seemingly every corner of the global economy has been affected by this downturn, the world of tech has already encountered numerous changes that are unique to its industry. These changes have colored the advice and information disbursed by the venture capital firm and have had a ripple effect throughout the larger economy. For instance, the manner in which many workplaces have gone remote to abide by social distancing regulations has placed a spotlight on video-conference applications and other remote work technologies. This has, in turn, highlighted the power of technology to fundamentally change the modern workplace and may provoke a larger conversation about the in-person nature of many jobs moving forward.
While the above situation has helped showcase the power of tech, the fallout from the economic downturn has also derailed many sectors of the industry, at least for the time being. Some of this has come about due to disruptions in supply chains for many technologies, some of which rely on manufacturing in hard-hit countries like China. One instance of this has been changes to the rollout of a national 5G network in the U.S. While this was previously a high priority for many telecom companies, many accounts say that the rollout has been delayed for the time being in light of reduced demand, manufacturing disruptions, and changes in available funds.
Insights from the Firm
Alterations to corporate plans, such as the potential downgrade to national 5G rollout, point to a larger question as the economic impacts of the current pandemic continue to unfurl — how can businesses adapt to changing customer demands? During this time of uncertainty, leaders from the venture capital firm have been busy sharing their insights on these topics to help business owners adapt to the new realities of the marketplace. One piece, written by firm partner Issac Roth, touched on this in a recent piece entitled “Thinking Through an Economic Contraction.”
Writing with the benefit of perspective gained during the 2008 financial crisis, Roth touches on some key topics business leaders may want to consider to better survive the current downturn. One important consideration here is the need to re-plan. While the ability to alter plans is already an important part of creating a thriving business, it may be even more important now in the face of such drastic changes to the market. In order to do this, the firm Partner suggests considering plans for a number of different growth rate scenarios. By evaluating a range of options for how the immediate future may play out, businesses can improve their ability to react to whatever economic realities manifest down the line.
Roth’s article also touches on the need for business leaders to reconsider product strategies. This was written with the understanding that many businesses created their products and accompanying strategies from the context of a very different economic climate. Customer needs were tailored to a bull market and growth was at the top of the minds of many individuals and organizations. While that may still be a long-term consideration for many customers, there are other pressing needs in the short-term that may supersede a more singular focus on growth.
Instead, businesses may want to update plans with a mind towards customer retention and, in turn, helping those customers retain their own customers as well. This mindset focuses less on growth and more on mitigating fallout from the current global downturn. Such a strategy requires an honest look at a company’s offerings and the true value they provide to customers. It may also require the paring down or alteration of these offerings to meet new customer needs. The more effectively companies are able to adapt to these new realities, the better able they may be to continue operations in the face of adversity.
While the global economic downturn has thrown many businesses into states of emergency, there can still be a viable path forward for companies that are able to remain agile and customer-focused. Looking to insights from experienced business leaders who have gone through past economic downturns can be a key component of navigating these difficult times. The above overview of insights from Shasta Ventures can act as a first look into the ways in which the company is contributing to this ongoing discussion. Look for additional information from the firm in the form of blog posts, videos, and webinars to continue to gain the benefit of its institutional knowledge.