A point made by my coach, Brian Howard, has stuck with me throughout the COVID-19 season. At the beginning of the pandemic, Brain said, “The world has changed. That means our clients‘ jobs have changed, which means our jobs have changed.”
Now, more than ever, each of us needs to take a realistic look at what we need to do to remain relevant for our team members and customers. Not only will this help us keep our jobs, but it’s also the most helpful thing we can do to support others in this unusual time. And, this is especially important for startups in light of likely decreased funding from investors. The organizations that listen to their customers and adapt to stay relevant are the ones that will thrive in this season.
In light of this learning, I wanted to hear how companies in the GAN Community are listening and adapting. I had a great conversation with Troy Vosseller from gener8tor to hear how their accelerator programs and funders are staying relevant in this season. Here is what he had to say —
Q. How many startups are in the gener8tor portfolio today?
A. In total, we are a little over 500 startups that we’ve worked with through our various accelerator programs.
Q. In what ways do you see gener8tor’s startups listening to customers?
A. There’s a company that went through our gBETA Milwaukee pre-accelerator program called Washbnb. They began as a laundry and linen cleaning service for individuals who owned and operated Airbnbs. The goal was for Airbnb hosts to have a trusted service provider to help facilitate the Airbnb rental experience. With COVID-19, the floor dropped out from beneath Airbnb. People were no longer traveling. But the Washbnb team had the relationships with the suppliers and vendors all figured out. So they pivoted to do laundry pickup and delivery for people who were working from home and were in a fortunate position to afford that type of service. Their pivot has been so successful that now it’s their core business — residential laundry pickup and delivery.
Q. On a practical level, are you seeing startup companies call up every customer right now? Are you seeing them do surveys? Are you even seeing in-person visits?
A. Generally speaking, overcommunication is a good thing. But there’s a fine line, speaking from the perspective of the founder. I know of many businesses that send form emails “We’re thinking about you during this crisis,” which doesn’t really add any relevant information or purpose. Inauthentic emails like that could lead to a cancellation. The key is the messaging and pacing of outreach. The ideal scenario would be that the business can effectively communicate with the customer, leading to long-term customer loyalty. Try by offering a reason for the outreach. Depending on the circumstances and business model, offer customers a discount/deal/perk/new service.
For those who used to have an in-person sales process and account management process, everything has shifted to be virtual. I think a silver lining of this COVID-19 crisis is that buyers, people paying money, are going to be increasingly comfortable with virtual interaction — both on the sales and account management side. I think that saves everyone a lot of time and money for startups.
Q. What methods has gener8tor used to iterate quickly and support your startups?
A. We have started sending weekly founder guidance and weekly staff guidance. A lot of the topics are along the lines of, “Here are our thoughts on the industry,” or, “Here’s the fundraising landscape.” or, “Here are the macro public health issues that we’re evaluating.” We also use these touchpoints to solicit information from our startups. For example, we asked our founders when they were thinking about fundraising next, if they’re nervous about it, and if there have been issues with investors pulling out. We got an above-average number of responses to these emails, which helps guide where we’re going.
This piece of communication is something we’d never done before. We had never sent a regular staff memo. We had never sent a regular founder memo. It was always more on an as-needed basis. The crisis forced us to frame our thoughts clearly and be regular with our communication. We now send this communication every other week.
Another thing we did as a company was build what we call an “Emergency Response Program.” We trained our staff on the various local state and federal stimulus and relief programs. Then we would offer a week of free webinars as well as free one-on-one consultations with any small business, nonprofit, artist, freelancer, or independent contractor to ask questions and get help. We wanted these Emergency Response Programs to be core to our “concierge” ethos, which is why we offered the one-to-one office hours. In total, we helped more than 5,000 small businesses through 22 Emergency Response Programs across the country.
Q. How many of your companies are you seeing change their business models entirely overnight?
A. Not many, but we’ve seen a few. Speaking to our investment portfolio, we have always been pretty bullish on e-commerce. For the longest time, we were somewhat ridiculed or looked down upon for that thesis. VCs told us that e-commerce is not venture backable. Yet when we look at the top five direct to consumer or e-commerce marketplace companies that we have in our portfolio, we see that they have cumulatively doubled their revenues during COVID. If anything, we are over-indexed on e-commerce, and right now that business model has wind in its sail.
Q. What are you hearing startups ask in this season?
A. Many entrepreneurs just want someone to talk to and be reassured, “Am I doing everything right?” Meaning, “I’ve sat in all of these webinars to learn about EIDL and PPP. But maybe I was embarrassed to ask what could be perceived as a remedial question in that public forum.” So they just wanted that human-to-human contact. The one-on-one interaction is the biggest change we saw.
Upon that realization, we took it a step further. We would solicit small businesses to sign up for a week of free webinars. Then there’s another link where they can sign up for a free one-on-one consultation. We then realized that beyond that, some people were nervous or overwhelmed, or they just had too much on their plate. All of this showed our small business owners that we care about them.
Q. How are your startups learning to prioritize right now?
A. I found myself in many of these Emergency Response Program one-on-one consultations with small business owners, and it seems like deep down people know what they should be prioritizing and what they should be doing. They just need space to implore their inner thoughts. So a lot of it was just giving people the opportunity to acknowledge that they likely know what to do and need to just go do it. In some respects, we were just giving the entrepreneurs space to give themselves permission to do that. Letting people pause and reflect helps them realize, “I am overthinking it. If I’m an artist, I’ve always wanted to do this new type of art piece. If I’m a startup, I always knew that I needed to catch up on this. I always wanted to pivot into this area.” Giving people explicit permission to pursue those things has been some of the best advice that I’ve been able to give.
Q. How are startups finding investment to fulfill their new goals and products?
A. We publish a monthly deal flow email that goes out to about 3,000 investors in our database. To populate the deal flow email, we reach out to all of our accelerator alumni on a monthly basis and ask if they are currently raising money. We provide a simple form with questions like company name, company overview, how much the company is raising, terms, etc. And we have them provide an up-to-date executive summary. The investor can search by stage, industry type, or any keyword. Our companies have raised millions of dollars from that email.
But, we started to realize that many investors don’t want to search through hundreds of companies that are fundraising. We wanted to create a more concierge experience, which is a big part of our brand. So we started doing a Master Pitch Week, where we curate a number of pitches for investors from alumni that are currently fundraising.
We had the idea to bring together the investors in our network, and our alumni companies — all it really took was asking. We had over 600 pitches in our first Master Pitch Week this past month.
Q. How are startups getting their teams to remain and get excited about the next products they’re working on?
A. We’re telling our founders what we’re doing ourselves as a company. What new programs and initiatives are we launching in response to COVID (e.g. Master Pitch Week, Emergency Response Programs, etc). So, there is some degree of information sharing between what we do ourselves as a startup with 50 employees, and what the startups we work with are trying and doing. So my hope is that a lot of what we’re experimenting with might be applicable to them. Hopefully, they can experiment with it. Admittedly we don’t have to have a strong mechanism for them to share with us what they are doing. It would be great to learn more what other accelerators are doing to experiment with crowdsourcing ideas from their alumni on a tactical or strategic level — particularly when it comes to company culture.
On the company culture side, one thing we did was declare two company-wide holidays. One was June 11, and the next is July 2. We shut the company down — no meetings, no Slack, no email, no texts, no calls. I think people aren’t taking time off in the same way that they normally would, just because the flow of life is different. Furthermore, you can’t really take a vacation anywhere. I think people are so accustomed to just work, work, work, work, work that we’re forcing them to take these two days off.
Q. How are you seeing startups avoid burnout?
A. It’s really been a mixed bag for us. Some founders have more energy than ever, mostly those who were traveling often and now get to stay at home. Peeling off the travel is a big weight lifted for me. I have more family time, and more time to be focused on work. For other founders that thrive in more face-to-face social situations, today’s rhythm of work creates an additional weight on them and they feel less energetic. Of course parents with kids have an additional balancing act with virtual school and child care responsibilities.
Q. Has gener8tor done anything unusual to support startups in this season?
A. Our mission is to be the best partner for a community to invest in its best and brightest. We gave everyone in the company $100 to support a local business, such as ordering food or a gift card from a local restaurant. We also encouraged them, if they felt inclined, to share which business they supported and why, internally and externally, to help promote that business. We also did this with the artists and musicians who have come through our culture accelerator programs. We gave $100 per employee to artists and musicians who have lost a tremendous amount of work, gigs, and so forth. Our employees enjoyed this because they got to pick which small businesses they wanted to support, and it was a bit of a delighter in an otherwise unfortunate time.