Sramana Mitra: We have a series that we do on our blog called Death by Overfunding. We have case studies after case studies of companies that had no business going out of business but went out of business for absolutely the wrong reasons.
One of my saddest case studies is this eBay seller who did phenomenally well. They raised a lot of money and started doing stuff that did not scale and stick. They went out of business and that company was so well put together to begin with. It hardly needed any money. It did fine as a bootstrapped company.
Shripriya Mahesh: It’s really sad when that happens.
Sramana Mitra: Any predictions or notes from the COVID time that you want to convey to entrepreneurs?
Shripriya Mahesh: I don’t predict the market anymore after my prediction on prices went so wrong. I would say that what I’ve seen from entrepreneurs who have navigated this time well is that they are super realistic. I have seen the spectrum of reactions to COVID. I think the entrepreneurs who just said, “Okay, this is what is happening. What do we have to do to get to the other side?” end up navigating the situation well.
Just be realistic. Make cuts. Make it once, and make it deep. This is very hard to do because your team has been with you through the roller coaster, but the entity that is often more represented is the company. The primary concern has to be the entity. How does this entity get to the other side?
They have adopted their model for an online long-distance world. I do think that we are in this world, at least till the same time next year. Hopefully, we have vaccines next year, but with poor federal level management and guidance, I don’t see how the US snaps out of this and returns to normal anytime soon.
We are telling our entrepreneurs to prepare for the long term. It’s hard to shut down a business line or refocus when you spent five years focusing on it. It’s much easier for us because we have a portfolio. Our entrepreneurs have it way harder and I recognize that. Putting those feelings aside for a moment, just think rationally about what you need to do to get to a year or two from now.
Those entrepreneurs have been much more successful at making the hard decisions and embracing where they are and looking for the opportunities in this world. Some of them have created new lines of business. I encourage all of the entrepreneurs to embrace reality and move forward with what they have to deal with. COVID is just a tremendous challenge. I encourage them to look at it with clear eyes and make the decision.
Sramana Mitra: There are another 18 months of difficult time ahead. You have to be realistic and you have to survive. Thank you for your time.