The troubled young founder, her voice heavy with concern, confided in me over the phone, “I’ve got to slash the marketing budget, and it’s going to bring growth to a screeching halt.” I took a moment before suggesting that this seemingly crushing setback might just be the catalyst she needed to unleash her inner creative genius.
In the same week, a founder of another rapidly growing startup employing over 500 people suddenly faced an unexpected crisis and slower sales cycles. To control spiraling costs and extend their runway, the founder had to make the heart-wrenching decision to lay off 100 dedicated employees. The founder was emotionally drained and down — I had never seen him like that.
As a SaaS founder and mentor, I interact with several entrepreneurs each week, grappling with trepidation and uncertainty. For many, the fragile economy of the last year or two has delivered a series of gut punches they’ve never experienced before. And you can’t blame their sense of shock. They had primarily experienced good times, with companies founded in the last 4-5 years when the economy was relatively healthy.
The availability of cheap capital and funding excesses of 2021 and 2022 resulted in startups flush with VC money going all out, chasing growth at any cost. With the slowing economy and tightening money supply, founders suddenly have to shift their mindset to efficient growth.
Related: Entrepreneurship Often Involves Uncertainty. Here’s How to Deal With It Productively.
Adopting a value mindset
I try to support these young founders by helping them to adopt the “Value Mindset.” I define this as predominantly three things:
- Avoid wastage at all times
- Accept what you have
- Find a way to win
Let me take you back to when our company fit into just two small rooms in Chennai, India. Feeding my six teammates was hard because cafes were too far, and our car tires kept getting slashed, so the whole idea of each driving to different places to buy lunch was unfeasible. At lunchtime, we moved the laptops and keyboards out of one room and turned them into a makeshift cafeteria for an hour.
Fast forward to 2023, and thousands of employees now enjoy an array of delicious meals in our cafeteria. Initially, we were paying twice what we needed to, as staff sampled dessert from one vendor while choosing main courses from another. To circumvent this issue, we set up a separate dessert station offering yogurt and poppadoms, eliminating extra costs.
In a contrasting example, McDonald’s restaurants in Chennai provide trays for customers to deposit unused ketchup packets. Meanwhile, I’ve observed American patrons frequently discard these packets into the trash, often simply because they’re unaware of this eco-friendly alternative.
Avoiding wastage, accepting our constraints and finding a way to win comes naturally to me and many of us Indians, thanks to our middle-class upbringing when resources were always scarce.
Related: Mindset Matters: How to Prepare Your Company for Ongoing Change
Understanding the value mindset
Whether switching off the lights on your way out or finishing up the last morsel of food on your plate, these have become deeply ingrained habits from our childhood. In one sense, most of India has a value mindset. That’s why I still can’t understand why all the lights stay on through the night in downtown stores in the U.S., especially when the whole world is struggling with climate change and energy efficiency.
Accepting what you have is an essential part of this philosophy. Whether it’s a team, or a budget, a captain of business or sport has to accept what they have and learn to play and win with that. If you start the game complaining about why the team isn’t right or there aren’t enough resources, one thing is guaranteed. You are never going to win.
Related: 5 Ways to Create and Maintain an Abundance Mindset
Navigating your desires
Waste and unnecessary expenditure aren’t exclusive to the realm of food. They pervade every aspect of a business. To help budding founders navigate these challenges, I encourage them to embrace their circumstances, maintain belief in their perseverance and devise innovative solutions to bridge the gap between available resources and aspirations.
The recent economic slowdown and the pandemic’s lingering effects have highlighted our desires’ precarious nature. The operative term for businesses of all sizes now is ‘efficiency.’ Adversity has a unique ability to ignite creativity, giving rise to ingenious strategies that enhance efficiency, promote mindful spending and pave the way for future expansion.
In our case, we’ve eliminated many licenses for third-party software products that we barely use and changed our laptop replacement policy from four to five years. We’ve also encouraged our employees to share their ideas to help spend more efficiently. Because of this and other measures, we can spend more in areas that need greater investment. This is who we are and how we serve customers facing the same constraints.
Related: Your Potential Success is Limitless, Despite What You’ve Been Told
I take heart from remembering that great companies are born and prove themselves in times like these. In the early 2000s, for instance, Google went from an ‘also-ran in search’ to the brand defining the category. Amazon was under pressure from Wall Street to trim its ambitions. Instead, Jeff Bezos held fast, and today Amazon is one of the planet’s most valuable enterprises. LinkedIn and Tesla Motors debuted during this same period – two companies that remain steadily successful today.
The obstacles to success may be higher now, but I believe this is still the time to win — if you focus on your positives and act prudently. Hold fast to your vision, and don’t be afraid to cut back now if it will drive you ahead later. The value mindset will help you in good times and bad. As I say to my team in Tamil, “Paathukalam” — come what may, we’ll be ready to face the outcome.
Read the full article here
