Crisis Response with Greg Coticchia — The Dispatch

Welcome to The Dispatch from Newberry Consulting Services, where we believe in building community through better management, better teams, and better business. I'm your host, Trevor Newberry, and I hope you enjoy the show. Hello and welcome back to The Dispatch. When the COVID-19 crisis began to grind life and business as we know it to a halt, my friend Max Pollack of Abstract Collective and a former guest on The Dispatch and I wanted to do something that would provide some context and wisdom for people and their businesses as we navigated the crisis together. Our idea was pretty simple. Reach out to our networks and find folks that had weathered and even grown during previous crises, such as the dot-com bubble and more recently, the Great Recession. We were overwhelmed by the response and generosity of our network, and out of that experience was born Crisis Response, a recurring webinar featuring business leaders whose experiences in previous times of crisis are instructive, insightful, and oftentimes reassuring when dealing with the current crisis. That we find ourselves in. With the generous permission of panelists and Max, I'm going to be sharing the audio from these webinars in the dispatch feed as we get them recorded and processed. Today is the first of those, our interview with Greg Kotykja. Greg is the executive director of Carnegie Mellon's Tepper School of Business Master of Sciences in Product Management. Before he served in this role, however, Greg was a serial entrepreneur, consultant, educator to founders and startups, and author. Greg's insights were amazing and gave us and our attendees so much to think about, as well as many tips to apply to our work to weather the tough days that we find ourselves in. So without further ado, please enjoy Crisis Response featuring Greg Katickia. Yeah, and I will then send it over to Greg to introduce himself.

Well, hello everybody. Max, Trevor, thank you very much for inviting me here today, and welcome to the folks that are online that are participating. My name is Greg Katickia. I am the executive director for the world's first and only master's degree in product management. I like to think of myself as the product manager for the product management degree, but I've spent a career in business. I'm not an academic. I'm a lifelong entrepreneur, and mostly in enterprise technology based in software in B2B commercial settings, and I've been doing that since, let's see, since dinosaurs roamed the earth, somewhere around the middle 1980s when these things called mainframes were still working. I think they're still working today. Today too, but a little less so. But it's been a great pleasure to be in companies that are literally started in a garage to multi-billion-dollar companies and everything in between.

That's awesome. Awesome. Well, thank you for being here. Before we get started into our questions, just a couple of things. We got video and audio off for participants. That's just to keep things clean so we can have a nice clean conversation. There is a Q&A box at the bottom of your screen for Zoom. We'll be monitoring that throughout the session, so if you have a question for Greg, for myself, for Max, feel free to put that in there, and we will tackle those as we go along. We've got a list of questions and prompts, and we're going to go for, I would say, 20-30 minutes or so just on conversation, but we want to leave time for that Q&A. And then, like I said, this is going to be recorded and uploaded to the Newberry Consulting YouTube feed, so look for that. We'll be sending out an email to everybody after this is completed so that you guys can access that. So cool. So, Greg, I want to go ahead and get started by talking about probably the most recent crisis that we've seen. And I want to get you to set the stage for us. Where were you and what were you doing when the Great Recession hit in 2008?

The Great Recession. Yeah, I understand they're calling this the Great Lockdown, by the way. And so it's already got a name. As I was thinking about where I was in the Great Recession, I was thinking also about I wonder how many of these things I've actually been through. And I actually counted up that I've been through 5 different long-term recessions in my career. Oh man, about 20% of my working time has been in these types of difficult situations. That doesn't make me an expert, that just makes me someone that's suffered through it. But in 2008, I actually was in a startup, a very small startup, and we were building electronic billing for law firms.

Okay.

And we were in the early stages of this company. The company actually had just started a couple years earlier. There was thought at the time in 2008, we were actually in the throes of trying to raise money. We're trying to do a small round because we were actually in growth mode until 2008. I remember sitting at our lawyer's office and the guy's name is Dave Lehman at K&L Gates and he said to me, Well, I said to all of us, the founders as well, it was, "Do you guys realize that there's an economic crisis going on?" They were kind of like, "Oh yeah, that's right. There's that." Because we had been in such terrific growth mode and not needed cash, and then all of a sudden the world just melted down. It stopped, just very similar to today. And we had to get creative. We had to take inventory very quickly.

Yeah, yeah. That was actually my next question for you is, you know, obviously the impact, as you just detailed, you guys were actually in the process of seeking funding. What— give us some details on what happened and how you guys had to manage that impact in the immediate sense.

Yeah. Well, in those days, what we did, and it's not that long ago, or at least it doesn't feel that long ago, Trevor.

We— It doesn't.

We really started to look at where we were going to spend money for growth, right? And that most important thing we had was the commitment to our people. Now, software businesses are primarily— their largest cost and, of course, largest commitment is to the individuals that work there. And so we first looked at, you know, we wanted to make sure we had enough cash and what our runway was in order to preserve cash and how long we could go based upon what we thought was a reasonable estimate of renewals. And we were in a subscription business at a very early early SaaS business, and we wanted to make sure that we understood that. We also looked at if we even had a modest amount of growth, how are we going to be able to service those customers without adding more people? What were we going to be able to do even if we were able to hold on to all the individuals that were in the company at the time? So we needed to make a plan for what we were going to do with capacity and work process. The most important thing I would say in mindset was you change from an income statement mindset, stop looking at top-line revenue and prospect customer acquisition, and start looking at your balance sheet and your cash position and where your assets are. So I think that's the fundamental change in your mind that you have to start planning for.

Yeah, that is a really, really great point. I feel like all of us, uh, probably felt that intuitively if we didn't think about it as succinctly as that is we went from go get customers, go get customers, go get clients, generate revenue to, oh my God, what do I have in the bank? What kind of assets do I have available to me? What kind of runway do I have? And that was a really, really immediate and dramatic shift. How did you guys, you know, how did that affect you guys? I mean, obviously, I— so actually a couple of things. I loved hearing You say commitment to our people, which is one of these things that we've seen such heartbreaking amounts of job loss during this, this crisis. It's just absolutely— it's— there's not a— there's not an analog to it. We can't really find anything that looks and feels like this. So knowing that companies, even small startups, you know, can have that mindset of commitment to your people. But in terms of this mindset of an income-focused mindset to a balance sheet-focused mindset, I'm interested in some of the specifics there. How did you guys shift your tactics? What were you guys doing to— how did that mindset shift affect your tactics and how you carried out your business?

Well, we realized for the amount of money, we weren't raising that much money in a Series A and we just decided to shut that down immediately because we knew it was going to be a tough road even in a normal marketplace, kind of in a no man's land. So, we said, okay, how else can we gain cash, preserve cash? And so, we started looking at traditional lines of credit. We worked with our banker to make sure that we could extend those lines of credit. We knew our accounts receivable line was and what that looked like so that we could obtain and maximize and utilize those lines of credit to our best advantage. I think the most creative thing, though, that we did, it was a little bit of selling the future, but it worked out in this case, and we were very thankful. We identified our customer list and we looked at our top 10 customers. And we were on annual subscriptions or monthly subscriptions, and we went to those largest customers and said, "What if you prepay for 3 years?" And we actually had all of them, 100% of those top 10 customers prepay for 3 years. We actually, and through that, we gained over $1 million in working capital.

Whoa!

Yeah.

So, that's amazing.

It goes to show you that, yeah, cash is hard to come by. Yes, it's me, but people also are bargain hunting on the other side of this, and they know that there's going to be continued demand This is not going to be forever. And so, companies, particularly the larger companies that have the cash and wherewithal, will know that they can bargain hunt. And we had solid relationships. They knew that we were growing. They knew their volume of what we were servicing was growing so they could lock us in too and control their costs. So, it worked out for both of us. We got cash. They got budgeted controllable costs. We survived and we didn't have to lay anyone off. We had our bank line. It worked out very well.

That's amazing. That's a real— and there's actually two things there, pardon me, that I want to drill down on. So the first thing is focus on your customers, right? So that's something that I've experienced in the services business. I'm sure this is a little bit different for retail, but maybe not so much, is to take a look at the folks that are actively involved with your business right now that you do have in your— as clients or as customers, and really focus on how can you How can you provide more help to those people? How can you really deepen those relationships? Would you say that that was part of that process as well?

You know, you move from a prospect to a customer even on your product roadmap. Speaking like a product manager, I would tell you, as you look at your roadmap and features you're building, forget about competitive differentiation and features that are going to win new deals. It doesn't matter. It's all about adding things that increase the stickiness and value that you're delivering to existing customers so they renew.

Yeah, that's amazing. Yeah, we, we, we did a very similar thing with my company where we said, you know what, this is probably not going to be the time to do the sort of differentiation work, right? We're going to, we're going to really drill down on the customers that we have, deepen those relationships, provide as much value as possible to those folks. So, and that has been, that has borne a lot of fruit for us. Now, granted, you know, we'd love to be growing the company right now, but yeah, when when things are like they are, it's, that's not maybe not the time for that. The other thing is the creativity in your offering. So changing that, that revenue model to saying, what would you, would you guys be willing to prepay for 3 years? So I'd love for you to speak a little bit to that. Like, did you guys have other ideas as well to diversify your revenue streams or to change the way you were delivering your offerings? Yeah, if you have anything to add to that.

Yeah, you know, and by the way, on even on that issue, there was some worry because we knew eventually that we were going to sell that company, which we did to Thomson Reuters, and we were worried that that prepaid would affect the valuation of the company with the cash. And it turned out it didn't affect it, right? They understood the model and what we did, and so there was that concern. We did look at some other things as well. We didn't jump to discounting though. A lot of people's natural thing is to say, well, you know, cut the price. What we tried to do is deliver more value in how we delivered it. We also looked at servicing small firms for free. And what we did is we offered tools because we knew that those small firms needed the assistance and would grow to larger firms, or, and this was important, they could be acquired by some of the firms that were out there that were already our customers or weren't our customers. And we wanted to make sure that we took advantage of people that were struggling at that time We can say, here's a free tool, free service for you kind of roll your own. And, you know, when times get better or something changes in your business, we were there to help you.

Yeah, that's amazing. Yeah, that's excellent, excellent insight. I want to shift just a little bit here to, you know, kind of a bit of a broad question, but I'm just interested because I do a lot of thinking about the emotional and social impact of these sorts of events. And I want to know, what was the scariest part of the Great Recession for you? Yeah.

I think just thinking that we knew that we did not have the capacity to service the customers at the growth rate we were at, right? We're experiencing, we were worried about where that was going to take us just as a general curve anyways.

Yeah.

And we really were desperate for that cash to keep things going, to keep the lights on and service the customers that we had. Sacramento, literally, we started this business in a townhouse. House, in a second bedroom of a townhouse in North Pittsburgh. And now, we had built this company and we had top 100 law firms and we were servicing literally billions of transactions and we're like, wow, is this gonna just fall apart now? Right? And just like today, it was a liquidity problem. It had nothing to do with the actual fundamentals of demand. It was our ability to keep up and get cash into the machine so that the, it kept the oil of the— the oil lubricated the wheels of the machinery. And that's what we were. So, I think the scary part was sitting down to figure out what it was going to take in making kind of the best case, worst case, most likely case, and planning accordingly and seeing what we needed. And then saying, okay, we can't raise that money now, where else are we gonna get this?

Yeah, and what was that range of, I don't know how many partners you had in that business, but I imagine there's probably a range of responses that you guys experienced, you know, everything from we're shutting it down to no, this is, this could be our next big thing could shake out of this. You know, what did that, you know, how did you handle that range of responses within your team? Yeah, because this, I mean, just, and actually just to set the stage like this, the shock of something like what's happening right now elicits really, really vastly different reactions from people. People. And having that team there is both a blessing and a curse, and that sometimes you've got people hollering vastly different ideas and thoughts and fears. So, yeah.

Yeah, it is a fearful time. It is today, and in some ways even worse. But I think what you always have to do at any point in your company is you have to treat the company as an individual, as a person who, you know, it is there and you have to be in service to it, right? It is always what has to be at the forefront. The unfortunate part of the company is it can't talk. It's kind of like a dog, you know, you need to take care of it, but it doesn't say much, right? So the only indicators you have are the financial health, the customer satisfaction, all these metrics that you have. Those metrics are going to speak to you on behalf of the company. And once you've prioritized what those metrics are, you'll be able to see what, you know, what is a reasonable 90-day or 180-day. You know, I always am also reminded what Eisenhower said is that planning is everything, plans are nothing. And you have to actually— it is a good time, it's okay to take a few hours, even a few days as a team to sit down and make those plans.

Yep.

Right? Even, you know, do the analysis and figure out what could be the possibility so you're prepared for what could happen.

Yeah, yeah. And that, I feel like that activity, doing that, serves you for so, so long. Even though that's something that's happening now in the here and now in the middle, in the midst of this crisis, that practice will serve you, your team, and your company for a long, long time knowing how to build that, build, do the actions of planning, right? I find that a lot of people are resistant to planning, right? That's something that I run into a lot. And for that reason that, you know, the quote that you just said, but that what I try to impress upon people is that the plan gives you the roadmap, the roadmap has to be flexible, things will change, but without it, you're just wandering in directions, right? And this is the perfect time. It's I don't know if perfect's the right word, but this is a time to be doing some serious planning for your company as well.

We did a number of scenarios in eBillingHub, which was the name of the company, and one of the ones we didn't plan on is we actually, in the middle of all this crisis, we also had an offer from a company to buy us.

Okay.

A lot of people would have thought that was, you know, safe harbor, you know, oh my goodness, you're in this crazy time, you're fighting for revenue, you're worried about capacity, Here comes somebody to buy you. And, you know, we turned that offer down. It was a hard thing to do, but we really felt that we were building something of value that we could actually extract more value for in a better time. So, that's another thing you have to think about is, you know, more conservative people will say, oh yeah, let's get out of this. It'd be somebody else's problem. We're gonna sell it. We'll take some money. Got out of that. But that may not always, you know, the run to safety may not always be the right thing to do either. Certainly harder to keep going.

Yeah, absolutely. Uh, switching gears one more time, um, one of the questions that I've got on here, uh, I think a lot about the entrepreneurial mindset, right? Um, this is something that we talk a lot about today. We've talked about for a long time, but I feel like it's a particularly salient topic in today's startup, um, young scrappy startup environment. Uh, I'm interested to see if you have any thoughts on how this entrepreneurial mindset, uh, helps and hurts during a crisis? How can we be, in the broader sense, how can we be more self-aware of the way that we're thinking about our companies and our businesses and some of the pitfalls and advantages that those afford us?

Well, I would criticize myself in this. I'm an optimist about the business and what's going to happen. Sometimes, you don't realize until you put your hand in the fire that, hey, this is bad. Bad, right? And so, you want to make sure that you, in those meetings that you talked about where there's all those differences, that all those differences are heard. Because there will be people that also wear a black hat and are constantly negative or conservative about everything and they need to balance out people who are, hey, we're going to make it through this, business is going to be fine. Because in that balance, in that compromise, you may find the winning path forward. Right?

Yeah.

I think that's really important to let all the voices and get a little bit of consensus. I mean, at some point someone has to make a decision, but don't be— don't ignore reality, right? This is happening. We are in a recession. There are problems in the economy. We are at record layoffs. We had our record meltdown in 2008, right? So, don't deny reality. It's out there. Deal with the cards. And then, you know, if you're honest with yourself and then speaking for your company, you can move forward.

Yeah. Yeah. I love that. That is something that I was going to add if you didn't add. I'm glad you did. I think the entrepreneurial mindset, we are sort of inherently optimistic and that's such a powerful aspect of our way of approaching the world. You do run the risk of potentially ignoring the real threats to your business. One of the things, there's a guy named Michael Hyatt that does a lot of thinking on business and leadership, and I listened to something that he said early on. He was saying one of the first things you need to do is assess the threats to your company, the real threats to your company. Ignoring them doesn't make them go away. You need to be aware of them all the time, but right now, you are especially vulnerable to those things. So you need to sit down and literally get a piece of paper out and make a list of the the things, the weaknesses in your company, and the threats to your company, both that existed before and that are heightened because of the scenario.

I would add one other thing, particularly for software entrepreneurs that are listening, as we know we've been in a long period of time and we have a lot of models of agility and iterativeness. That pace is going to slow a little bit, right? Yeah. And that's not necessarily a bad thing, but the iteration, your customers are not gonna be able to listen and absorb all those iterations as they did just a couple months ago. So be aware of that. Don't let that iterative nature and testing nature. I spoke to someone who was an executive at one of the home delivery, food delivery services a couple days ago, and she was even saying, you know, we're testing things, But the data that we have now is pretty much useless because it's an aberration in the marketplace. We really don't know what will hold, what demand will be. So, take that in mind. You may not need to move quite at the pace you were moving before and be a little bit more deliberate. It's not that those techniques are not valid or good, but they have to be put in the place and time that we are today.

Absolutely, 100%. I love that. Before we get into the last couple of questions here, before we turn to a Q&A, I wanted to see if we could maybe tackle a couple of specifics. If you were advising somebody right now, a lot of us were caught off guard by this. I am an avid reader and watcher of the news. I was caught off guard by this. I knew it was coming, but the gravity and scale of it was just bonkers. It blew my mind. So for most of us that are caught off guard, flat-footed, what are, you know, maybe your top 3? Like, this, this is thing 1, thing 2, thing 3 that you need to be doing first and foremost to get out of the paralysis mode, out of the shock mode, and to be moving forward?

Yeah, well, you know, in general, my advice in these environments is cash is king, cash is king, cash is king. So, you know, Give yourself the information you need. Assess where you are relative to your business so you know your runway and your way forward. That's the truth. Hold up the mirror. Know where you are so that you can make good decisions for your business, for yourself, and for your employees, right? You know, and I think along those lines, then I would go back to what we discussed earlier, Trevor, which is, once you've done that inventory assessment, Plan ahead, you know, get the team together. If you're a solopreneur, figure out where you are and start making assessment of what you can do. And I would put that through the lens that we talked about earlier as well. Customers, customers, customers.

Yes.

Focus your work on your customers, how you deepen those relations, broaden those relations, strengthen those relationships. So I would say that's a 2. 3 is take care of yourself. And that's— this is a difficult working environment. This is— it's stressful in a normal environment. Who doesn't have Zoom fatigue? Who is not struggling with the lack of a handshake or a hug or going out to a nice meal or a social event or seeing a play or a sporting event? These are things that we, you know, crave as human beings. And recognize that you need to actually— that your mental state and health is going to be important for for you to serve your company, your team members, everything around you. I'll add a fourth one in there. Yeah, go for it.

You can add as many as you want.

This too shall pass.

Yeah.

It's not gonna be forever. And everyone's talking about new normal and normal this and what is normal. We don't know. Yeah. And uncertainty creates an incredible amount of anxiety and stress, right? The best you can do is the best you can do. Take it a day at a time. Do your best planning. Make your assumptions. There may be something else that is just as eventful as what we've just experienced in the last 60 days that comes along that could be as positive too.

Yeah.

So, I'm not, you know, things will get better. It doesn't— this does not last forever.

Yeah. That actually brings up one more point. One last thing before we get into Q&A here. What did life look like emerging from 2008's crisis for you and your company? You know, we're talking about right now what we can be doing immediately in the midst of this crisis. But as we begin to emerge, right, and there are a lot of unknowns. This is a virus, right? This is a pandemic disease that was not a part of the equation in 2008. But as best as you can recount for us, how, what was life like like and how did your company emerge from that crisis?

I think there was, in general, from customers, it was a longer selling cycle, right? The good news for us is that we had survived and I think as a smaller company, many of the larger law firms wanted to make sure that they were doing business with someone that was capable. Of managing the crisis. And I think that we survived and grew and continued to do well actually worked in our favor, and we actually built good referenceable customers who helped us then gain more additional customers. Longer selling cycles, smaller initial sales with people, you know, we didn't have big bank sales, so it was a, it was a slow way out of of it, probably taking another, you know, 12 to 18 months. Volume was good though. Volume was good. It was just smaller transactions that took longer. So, I don't know if the same thing will happen here. One of the things that's interesting about today is some businesses are certainly benefiting and some businesses are really being deeply harmed. And so, there's going to be some folks that, are going to be very much tested in terms of their business models.

Yeah.

You know, I think that's another part of it is, in that going back to our planning, not to jump around here, Trevor, but look at your business model. You know, go back to your business model canvas, basic tools like that if you're not familiar with them, and look at those assumptions.

Get back to basics.

Get back to basics, right? But emerging out of that, I think if you've thought through your business model, when things change, all the assumptions that are in those 9 boxes, really 7 because 2 keep score, is that you're gonna see, you know, part of that is partners and suppliers and, you know, customer segments and everything. You're gonna be able to see where you can maneuver. So I think, you know, keep in mind that I'm not someone— I would love to see us go in a V and the lights go on and we go right back to where we are. I just don't think that this kind of shock to the system or past recessions have instructed us that it's a fast path backwards.

Yeah.

You know, the good news about this is demand did not fundamentally change. We had a great economy and that demand has not gone away. This is a, as I said earlier, a liquidity issue.

Yeah. That's great advice. And actually, I think you highlighted one of the questions that I'm looking at in the Q&A right here is, you're talking about software sales specifically because, you know, that's It sounds like kind of your background. It's the, it's the world that I work in. I think that's one of the areas where the demand especially has not necessarily gone away, but maybe the business model has changed a little bit. But can you speak a little bit to specifically the software sales side of things during the 2008 recession? And then maybe how that's— there's some analogs here?

Yeah, I think what we saw there was we were getting regular deal sizes that were probably, you know, $100,000 to $200,000 for initial sales.

Okay.

As we climbed out of the recession, oh, and they would probably happen within 90 to 120-day period, kind of from initial lead to qualification to some type of demonstration to a close, whatever it was. And so, I would say that elongated to about 6 months and the sales price would probably be more in the $60,000 to $75,000 range to start. So, we did take a haircut in terms of the average deal size. Eventually, it got back up to the larger deal size, but it took time because people were, again, very particular with cash. They wanted to hold on to their cash if they were a new customer. And even then, that was considered, okay, that's a larger deal size. And they were looking very much at what is on the list of things we have to buy, the old saw of, is this vitamin or is this aspirin, right? And, you know, luckily we were able to position ourselves, and I think we were for a lot of companies aspirin for the pain they were going through for electronic billing. So I think you have to realize that those types of fundamental things are going to change. We ended up with more people also in the decision-making process. So we had typically, you know, a technology officer or technology person a billing person, and a financial officer. And that expanded to people who maybe were a managing partner or somebody else that, you know, that group needed, there needed to be more approval for spend. And some of that was because that was put in place during the downturn. And then, that just kind of continued on until things kind of loosened up again. So, I would be prepared for that. Yeah.

So, you're seeing smaller deal sizes, more people involved, basically indicating that, you know, and I think we should expect this here as we exit exit this crisis, we'll see people a lot more careful about the money that they're spending, and probably adding layers of whether real or perceived checks and balances on that spending, right? So more people in the room, more people that have to say yes in order to move something forward. So slower, probably slower sales cycles, etc., etc., so on and so forth.

Yeah, I think that will happen. And then as people gain It's just like any normal human being, right? As you gain confidence again and you get more—

Start spending more money.

Less, the sales cycles come in, you don't need as many people, and it comes back to normal.

Yeah, absolutely. Switching gears to some of the interpersonal side here, and as you work with students, right? Interested to know, got a question here, and this has been asked several times on different webinars that I've participated in, but, you know, we're used to deepening relationships with face-to-face meetings. How are you guys managing the, the email Zoom clutter and sort of the fatigue that occurs as a result of being online? Yeah.

I wish I had a silver bullet for that or a big answer.

Yeah, me too.

I think Zoom fatigue or whatever your service is, I don't mean to promote Zoom, I don't know any other stuff. It's real, right? And I think the best thing you can do is take care of yourself. Yourself and how you plan your own schedule. You know, you don't have to always be on Zoom. Email is still available. You can use Slack. Not every call has to be a Zoom call even though we've all figured out how to use it. You can talk on your cell phone and you also can exercise. You can take a walk. You can actually make a sandwich for yourself and take a break. You know, enjoy every sandwich. So, these things are going to help reset you. They don't directly answer the problem of this virtual world that we're now living in. Although, I will caution people that as we go to a new normal, I don't think there's anyone that would disagree that this style of discussion is going to be an increasingly larger part of how we work. So, maybe that's a good one for our entrepreneurs who are on the line here today. There's a problem and a pain that needs a solution.

Yeah, yeah. This is very, very true. It is a little overwhelming. I've been working from home for a couple of years now. It was less of a transition for me, but I have neighbors and friends that are transitioning to this work-from-home environment where there's a lot more focus if there could have been a lot more focus on email, but also this lack of face-to-face contact, video meetings, and there's a real fatigue with it. But I agree with everything you're saying. For me too, it's a matter of routine is really, really important. My days operate, they operate the exact same. I try to get up at the same time. My eating habits have not changed. I do exercise. I keep, I keep a schedule and that helps keep my head a little less crazy, although a little emphasis on a little less. So yeah, I love that. So one other question that came through here, and I think this is a great question, this is a conversation I've had with several people, is that is there something that can be done in a normal, whatever normal is after this, environment to be a little better prepared for unforeseen circumstances like this?

Absolutely. And I think, you know, this is where, this, this is where when you talk to people and they talk about contingency planning or resiliency, and we thought, oh, that's a nice white paper, we'll get around to that someday. Yeah, resiliency. Yeah, after— look, bad things happen to businesses, not just economies, right?

Yeah.

And we've got to make sure that we've planned for those. Now, to what degree? I used to be in the cybersecurity business, and there was a gentleman, Dr. Peter Tippett, who actually had created the first antivirus and sold it to Peter Norton, of all things. You may have heard of Norton Antivirus. And he used to always talk about us preparing too much for the things that may happen that have very, very low probability. Right?

Mm-hmm.

And so, we do need to take that into consideration. Sure. You know, that you can't plan for every type of outcome, but there are some things. I mean, if you take a look at the things that we talked about today, this could have happened in a marketplace, this could have happened to you relative to a certain competitor. It just happened to happen as a pandemic in the economy. But, you know, getting prepared to conserve cash, understanding what levers you have in your business model, understanding how you move from prospect to customer. Knowing where your lines of credit are, understanding your inventory of your work people, how they work, where they are. These are things that good managers, good leaders should have at their fingertips.

Yeah.

This is not— this shouldn't be surprise work or, "Oh, I have to learn about that." You know, these are things we should know, monitor, manage, and be top of mind as we're figuring out our own planning and resources, whether we're in growth mode or conservation mode. And I think that should give us some confidence if you're doing doing the fundamentals right, it should get you, you know, 70-80% of the way.

Yeah, that's a great answer. I love that. I have nothing, nothing to add to that. Everything that we're talking about doing right now, do that when this is over. When this, when we go back to whatever normal looks like, continue to do those things because what it's caused our typical entrepreneurial, very fast-paced, especially in an economy that was going gangbusters for 10 years, very aggressive positioning and activity. Sometimes, we forget to go back to basics and make sure that we do have enough cash on hand, make sure that we are just exercising a little bit of conservatism and protective nature with our businesses because these things will happen. You're absolutely right.

Well, accounts receivable, accounts payable, you know, collect early, pay slow. You'll have more cash.

You'll have more cash on hand, 100%. Yep, I'm with you. I have, let's see, Max, I know you're muted right now. Is there anything else, Max, that you want to add? You want to bring up? Sure thing.

So we actually sourced a couple other questions, Greg. This first one is about VC funding. So the question reads, the majority of VC funding goes to founders in 3 states: New York, California, Massachusetts. What advice would you have for business operators who will need to raise a round of financing in the next 0 to 3 years outside of those geographical areas?

Don't or move. 3 years is a long time, first of all. Let me, in all seriousness, let me back up. You know, there's so much that goes into raising money. I've raised close to $100 million. I've been involved in 14 different startups. I've exited from a couple of them quite well and, you know, doubles and singles and triples in between and some wonderful learning experiences too. Certainly, the near future, let's just carve out the next 6 months. For PE firms, VC firms, whatever it is, they're going to give the same instructions that Trevor and I just spoke about earlier to their portfolio companies. Conserve cash, don't look for another— the funding that you were putting together, forget about that, kick that can down the road, or let's wait this out. So, for new funding opportunities, you'll see announcements that come out out and I've read them over the past few months and people are probably saying, wow, how did they close that? Well, they've been working on that for a year, right? And this, that momentum, there was cash in place and they're just completing it. But to start that process, or if you were early on in that process, I think it's going to be extremely difficult. Plus your valuations. I feel really sorry for people that put their money into companies in November, December last year, and now looking at that portfolio evaluation, how are they ever going to get the money out of some billion a $50 billion unicorn that was announced in October last year. VCs are going to be very worried. I mean, VCs, where do they get their money? They're getting it from wealthy people and organizations that have a certain amount of their portfolio put into this type of risk. That part of their portfolio is gone. We can say that 30% of that money just vanished for most organizations. People. So, I think it's going to be a very, very, very difficult time to raise money in. So, I would go back to the cash is king, work with customers, gain, if you can gain new customers by doing specials, add-ons, some crazy stuff that you wouldn't do in normal times. And I am not a fan of one-offs or specialties or anything like that, but you gotta do what you gotta do to survive in the near turn. The world in January of next year could be a very different place, not just because it's 2021 and we've magically turned the calendar, Max, but, you know, that's a long ways away, and we're going to hopefully be in a better position to know how to work in the new normal, which will give people confidence and bring some markets back. So my advice for fundraising is get it from your customers It's non-dilutive anyways. If there's a grant you can work on in the meantime or secure, or a bank that's willing to give you a line of credit to keep things going, keep the lights on, perfect time to work on those things. Go back to that fundraising when things start opening up again and you start seeing this marketplace come back. And I sure hope it's not going to be 2 or 3 years from now. I don't think it will be. I'm not that— I'm an optimist, but I'm not that pessimistic. Pessimistic. Yeah.

Yeah.

Hopefully, that answered your question for the person. Yeah. Yep.

And do we have time for one more?

Yeah, let's do one more. Our attendees are holding. We've only lost a couple of them. We're good. It's a good conversation. Keep going.

So, the question reads, notable businesses have been born out of past failures. What opportunities do you see this crisis presenting? And how do you recommend entrepreneurs looking for pivots or opportunities in their current, or maybe starting a new business altogether.

Couldn't agree more. There are a lot of problems that are borne out. Look at the business that I'm in, in the university business. It's going to go through throes of transitions, and it's not just this business, but even traditional retailers who were not who are holding on before this crisis and changing their business model and investing in digital transformation. This is only an accelerant to all that, right? And the problems that it's going to create are problems that entrepreneurs can solve. We just identified one in this short conversation, this whole idea of Zoom fatigue and, you know, how do you take care of yourself or is there a better way to create that? We've worked in mechanisms like this, like Zoom, whether it's WebEx, GoToMeeting, whatever it is, LogMeIn, for what, 15, 20 years? Has it really changed all that much? I mean, it's gotten better, but is this really— is this the model? Is this the best we can do? Who knows? I would hope that not only ways to make this move to a virtual digital environment is going to create create throes of opportunities that are going to aid people who need to radically change their business model and do it quickly. And they are going to be looking for things. One final thing on that, for instance, I run a large conference here in Pittsburgh that we started a couple years ago called Pittsburgh Product Camp, one of the many product camps around the world. And that's probably going to end up being virtual. And I've been looking around for platforms and I saw there's a great new startup for conferences called Hopin. Happen. I don't know if that's the one I'll go with or not, but it was great to see it was an early-stage small business. And when you look at the way they're doing their conferences versus some of the ones that have been around, you can see this is a next-generation tool. And there's things in there that they've taken into consideration. And I think these opportunities are going to be born out of this crisis. There will be entrepreneurs who figure out where the pain is, and they're gonna solve it.

I love that. Yeah, that was great. Greg, I— this has been a fantastic conversation. I really feel like we have covered a whole lot of material. I appreciate you giving your time to this as well. This has been really meaningful. This is— I think this is the way that a lot of us stay sort of connected and sane. So talking to people and hearing from people that have experienced crises, and gaining from your wisdom is, I think, really, really valuable. So thank you very much.

Well, it was very nice of Governor Cuomo to stop his daily briefing early. I know, it was really good.

I didn't think he— I didn't think he got my email, but turns out he did.

Thank you, Trevor. Thank you, Max. And thank you for all the people who are online. I really appreciate it. Feel free to reach out to me on LinkedIn.

Yeah, Greg, there was one thing— I know you are actively seeking some internship opportunities for some of your students. I didn't know if you wanted if you wanted to say something about that real quick.

I appreciate that, Trevor. For those of you who are looking for very talented master's degree students in product management, these are students that have up to 5 years' work experience. We are, in this economy, of course, trying to make sure that we have placement for each and every one of them, and they'll be graduating in the fall, around December, actually early winter in December, So, great opportunity if you're planning ahead and you want to talk to my students, feel free to connect with me. I'm happy to get you their resumes and hopefully we can do some matchmaking and they can benefit your company and your customers.

Awesome. That's great. Max and I both have an offering that we are going to tell you a little bit about real quick. It shouldn't take but a minute if you'll hang out. Max, if you want to go ahead and start. Go ahead. Sure thing.

So one of the things that Abstract Collective is offering is a digital presence audit. Right now, those digital and online channels are of the utmost importance with COVID-19 and everything happening. So what this looks like is we'll pick 3 companies that reach out to us to do this for free. It'll follow a process where we evaluate where you are, create a set of action steps, measure the impact, then figure out how we do this for growth over time. The case study that I've been sharing around with this is we actually worked with one client who over the past month has actually seen their website visitors triple and their revenue double because they were prepared for what COVID-19 might do and how it might impact their business. So details of that will be shared after the webinar in the follow-up email, so keep an eye out for that.

Awesome. And Newberry Consulting, we're offering a free strategy session. We're doing those on Thursdays. They're 45 minutes long. We wanted to do something that could be helpful to our partners and colleagues in the business community. So we're covering 3 main topics: mindset, assessing your sphere of influence, and then creating flexible plans to navigate this crisis. So it's absolutely free. You'll get emailed a report from the session afterwards. All you have to do is go to the website newberryconsulting.com. You'll see a big green button to register there. We're doing as many of these as we can on Thursday. Every week. If there is a lot of demand, then we will maybe look at other times, but that's what we're doing. So if you guys think that would be valuable, or if you know anybody that thinks that would be valuable, please feel free to share that with them. So with that, guys, this has been the first crisis response webinar. We're doing several more of these. You'll get some email notifications about it, but we really appreciate it. Greg, thank you so much. We are going to actually have this on a YouTube channel, so you'll be able to return to this if there was a bit that you caught and you can't remember what it was, you can go back and check that out. We're also going to be sending you guys an email with all the information that we covered in terms of links to people's resources. So thank you so, so much. Hope you all have a lovely week, stay strong, and we'll let you know about the next one soon. Thanks, everybody.