The Corona issue – what to think about it ?

Fri­day Mach 6, 2020

To: Goril­la Capi­tal port­fo­lio com­pa­nies

From: Ris­to Rau­ta­kor­pi

The Coro­na issue – what to think about it

Note – I focus enti­re­ly on the busi­ness implica­tions, per­so­nal health & safe­ty is of cour­se #1 prio­ri­ty and I lea­ve tho­se mat­ters for the Healthca­re pro­fes­sio­nals to advi­se on.

I rat­her cry wolf than regret later, and as “only the Para­noid sur­vi­ves”, I’m OK to be the para­noid.

No-one knows yet what the end outco­me of the Coro­na issue will be. But alrea­dy now it has caused a visible dis­tur­bance on busi­nes­ses and eco­no­mies worldwi­de and the ripple effects are yet to be seen. Some busi­nes­ses are affec­ted more than others, but very few will be comple­te­ly immu­ne. For some (like face mask pro­ducers or remo­te wor­king solu­tions) this can crea­te a mas­si­ve wind­fall.

Your busi­ness will be affec­ted as well. In what way, when and how seve­re­ly, depends. That’s what you should now form a view on, and do miti­ga­tion accor­dingly.

A like­ly sce­na­rio for any­one sel­ling to cor­po­ra­tions: In the 1st wave, they focus on their people risks: they cancel atten­ding events, making busi­ness trips, they ask people to work from home etc. In the 2nd wave they do the imme­dia­te adjust­ments to their own busi­ness (such as air­li­ne industry), in the 3rd wave they start calcu­la­ting the cost of all that, and how to balance the effect. They will try to assess what their cus­to­mers do and how that will affect their own busi­ness. The 1st thing they’ll do is step on the bra­kes and will do only the man­da­to­ry until the dust has sett­led – which means anyt­hing non-man­da­to­ry will be post­po­ned. They will try to mana­ge costs, in antici­pa­tion of their reve­nues decli­ning. This may mean lay­offs, freezing any new costs (such as deve­lop­ment pro­jects) etc. They will have to add new issues on their agen­da, chan­ging the prio­ri­ties. At this point you will start fee­ling the heat.

The­se “never seen befo­re” cri­sis are part of the busi­ness cycles. I’m older than any of you so I have expe­rienced a few (and their direct con­sequences) myself: oil cri­sis 1973, Cher­no­byl 1986 (this was par­ticu­lar­ly sca­ry in Fin­land, due to the typical wind direc­tions), Iraqi war and 2nd oil cri­sis 1990, dot com crash 2000, Financial cri­sis 2008. Not to men­tion the next tier – SARS, Thai­land Tsu­na­mi etc.

It’s not a bug, it’s a fea­tu­re. If you sail across the Atlan­tic you’re like­ly to get into at least one big storm. You know that from the start so you pre­pa­re accor­dingly. And when the weat­her map turns dark, you get rea­dy: you take down sails, clo­se all holes, tie eve­ryt­hing down, eat and rest whi­le you still can, make rain­gear rea­di­ly avai­lable. When the storm hits you, you are pre­pa­red. Then you do what you must to stay afloat, and just wait. Even the worst storms end one day, the sun is shi­ning again and smooth sai­ling can con­ti­nue.

But whi­le sai­ling after is no dif­fe­rent from sai­ling befo­re, busi­ness after a cri­sis is never qui­te the same as befo­re. Oil cri­sis trig­ge­red the need to reduce depen­dency on oil, Financial Cri­sis tigh­te­ned regu­la­tion of financial mar­kets etc. The man­kind is trying take mea­su­res that “this could never hap­pen again” (rat­her success­ful­ly, as the next major cri­sis is always a “never seen befo­re” kind). Tho­se chan­ges crea­te a ton of new busi­ness oppor­tu­ni­ties.

The Coro­na situa­tion – once over and back to nor­mal - will trig­ger such chan­ges as well. What exact­ly, we all can make educa­ted gues­ses about. They too will crea­te oppor­tu­ni­ties.

Pro­fits are made during the high sea­son. Stra­te­gic moves are made during the low sea­son.

My call to action to all of you:

  1. The even­tual con­sequences of Coro­na will affect all of you (and us, as a result). Mea­ning you all need to take it on your agen­da.
  2. You should ana­ly­se your situa­tion (and that of your key cus­to­mers), play with some sce­na­rios and form a view on what you assu­me the implica­tions to your busi­ness to be
  3. What is it you can and should do to miti­ga­te the nega­ti­ve effects. Crea­te an action plan on what to do if the storm hits you, and what is the indica­tor tel­ling you the storm is on
  4. What new oppor­tu­ni­ties will this crea­te, once the storm is over. How could you best bene­fit of it?

I since­re­ly hope none of this is ulti­ma­te­ly nee­ded and the world goes back to nor­mal soon. But it would be irres­pon­sible to just count on being luc­ky. Hope for the best, pre­pa­re for the worst!

Ris­to

Problem/solution fit canvas

Ste­ve Blank wro­te ” The dif­fe­rence between win­ning star­tups and tho­se who­le lose is that the win­ners unders­tand why cus­to­mers buy. The losers never do”.

This is the mate­rial ques­tion of problem/solution fit.

The­re are dif­fe­rent ways to address the problem/solution fit. One of the first tasks is to seg­ment the infor­ma­tion you have veri­fied on cus­to­mer seg­ments. This should con­ti­nuo­us­ly be kept up-to-date.

On good tool we have found is from Idea­hac­kers ( https://ideahackers.nl/ ) and their problem/solution fit can­vas:

More on the problem/solution fit can­vas can be found here: https://medium.com/@epicantus/problem-solution-fit-canvas-aa3dd59cb4fe

Then goal is to iden­ti­fy what is the best problem/solution fit for your com­pa­ny to pur­sue furt­her.

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