10 Things Startups Need to Know in a Crisis

By: Stephanie Porfiris, April 08 2020


Guy Kawasaki, marketing wizard and Chief Evangelist for Canva reveals the 10 things that all startups need to know to survive a crisis.

If this is the first time you’re hearing about Guy Kawasaki, you’d better prepare yourself for two things: (1) you’re about to learn a lot and (2) you’re never going to forget his name. 

Guy Kawasaki is a world renowned marketing wizard and the Chief Evangelist for online graphic design company, Canva. He is most known for his time at Apple working with Steve Jobs as one of the original team members who launched their Macintosh line in 1984. As if that’s not enough, he also founded multiple tech companies in Silicon Valley.

In a riveting and, frankly, delightful interview , Guy gave us the skinny on how he thinks COVID-19 will continue to impact the tech industry.  Brilliant and brutally honest, here are a few of the no-holds-barred takeaways from our conversation with Guy that every startup needs to know (even when it hurts).

It’s a marathon, not a sprint

Actually, Guy says it’s more akin to a decathalon. Businesses need to run the right race, and in order to do so they need to not only go the distance, but also be skilled at a number of different events. The finish line is not in 26 yards, it’s in 26 miles, so make decisions based on a long haul.

Focus on cash. Cash is king

In the current climate, it’s not all about maintaining your image or your brand. It’s about survival. While that may come off as a little less “marketing wizard” and a little more “Hunger Games”, Guy raises a good point here. The days of liberal spending are gone, and they’ve been replaced with carefully organized budget models meant to ensure survivability. 

Milk your installed base

The easiest way to make a sale is to sell to someone who’s bought from you before. While I’m sure we would all love to grow our audience and customer base at every corner (did we mention you should sign up for Elevate Insider newsletters?), if Tip #1 has shown us anything, you’ll be hard-pressed to find a brand new demographic that’s ready to part with their carefully-budgeted funds.

Take control of distribution

Do business directly. While we all love Amazon as a one-stop shop for everything from light bulbs to cat litter, if Amazon decides that your product isn’t essential, you’re in trouble. If you can sell directly to your consumers, do it, because multi-tiered distribution is only going to set you up for failure. 

Evaluate your supply chain.

For generations there’s been an ongoing quest to find the cheapest offshore labour. If these past few weeks have taught us anything, it’s that offshore manufacturing and labour is hamstringing the very companies it once propped up. Manufacture locally when you can so that you’re not reliant on ships coming across the ocean.

Cut deep. It’s better than not cutting enough.

This is a tough one, and it’s a conversation that no one wants to have. Unfortunately, it’s one that has to happen. 

“The biggest regret that people in these situations have is that they think they’ve cut too deep. They let good people go, they cut programs and they cut product lines. When the dust settles, I think people will look back and say ‘I should have cut deeper’”. 

As Guy says, there are two types of regrets at the end of this–the regret that you sacrificed too much, or that you cut too little and died. It’s better to cut too much if it allows you to survive a life or death situation.

Be transparent with your people – and offer what you can

Whether it’s on workload, cash balances or cost reduction, if there was ever a time to be transparent, it’s now. You’ve all heard the saying that “in order to do great work, you need great people”. That’s easy to say when things are going well, but it rings even more true when times are tough. 

A way to lessen the blow? Guy offers a brilliant solution: leveraging stock. In his words, “stock doesn’t affect cash flow, so be generous with your stock options right now.”

If you’re looking to learn more about the importance of treating team members with empathy, be sure to check out this post featuring Mark Cuban!

Be forgiving–everyone has problems and makes mistakes right now.

Optimism is great, don’t get us wrong. But along with optimism should come an air of realism and understanding of our current situation. Don’t be so worried about compromising a brand or upsetting your supply chain, because everyone is going through the exact same thing you are. Whatever the consequences to your image, they’ll be a lot worse if you go under. 

Ask Yourself, “Therefore…What?”

We’re in a time of great pain; there’s no debating that. But Guy’s confident that we’re also in a time of great opportunity. When we look at the impact of COVID, there’s been a tectonic shift in our habits. Guy recommends taking some time to ask “therefore…what?”. 

There have been leaps and bounds in online learning, remote work, e-commerce and more. 

  • What does that mean people will be doing in 3 months?
  • What will their habits be?
  • What needs does that create?
  • Which resources should be available to meet them?  

Guy has a favourite example of this:

With the invention of the mobile phone people were handed a device that could connect them with the rest of the world and, only a short time later, nearly every model had a camera. 

Therefore…what? Therefore, people would want to share their photos online. 

Therefore, a little app named Instagram was born. 

Don’t Be Defeated

There’s no sugar coating it – this is a scary time for businesses, especially startups. There are difficult conversations to be had and difficult decisions to be made, but there are ways through the fog. In Guy’s words:

“Bad times usually create great companies. Great times usually yield s*** companies. In a great time when a rising tide is floating all boats, any butthead can be a captain in a rising tide. It’s someone who’s very good who can be a captain in a falling tide… That’s the nature of entrepreneurship. If you’re a person who believes you can only start a company when the economy is great… you are not an entrepreneur.”

In essence, survival is possible. In fact, this crisis might just be the making of your business.

This article was originally published in April 2020 and updated in April 2022.