By Isaac Jeffries & Erin Wallis
As the current economic climate evolves with COVID-19, we have been sharing some perspective from both our own work and the continual conversations and support we’re offering others. Initially, we shared a metaphor about what this first felt like – like our house was burning down and we were setting up camp. After a few weeks set up at camp, and many conversations by the campfire later, we then shared some perspective on what people were feeling and how they were coping. Now five months into these altered conditions, we’ve started to hear more frustration creep in. “What can we do now?” and “How can I keep moving forward?” – we’re definitely not on our way to recovery yet, but we’re moving towards it.
Below, we share some of the practical advice about finding motivation in a difficult time, and pose some questions to get started.
Review the “The Dip” with your team, board, and funders
Perseverance is not always a virtue, and quitting is not always a sign of weakness.
Do I persevere or fold in? How long do I keep going? How do I know it’s worth it? These are hard questions. Seth Godin has written great book called The Dip that addresses what we go through when we’re asking ourselves these questions and how to go about answering them.
Most projects start out optimistically – if they didn’t, then we’d probably never start in the first place – but after a few small wins, there’s a hitch, and you come crashing back to reality.
For example, say you’ve started a side business selling handmade soaps. It starts off really great – your Instagram followers are growing daily, and you’ve made a couple hundred sales! But after a few weeks, the natural momentum slows right down. This can be demotivating. At this point, you could conclude that ‘this is just a hobby’ or, that you ‘really want to make something of this’.
This is where The Dip comes in. You’re in a dip of motivation, and either you can continue to put in the effort, despite the lack of motivation, or decide the effort is not worth it in the long run. How?
First you must ask yourself: Will things get good again? What does good look like? And how long do I think this will take?
And if you think things will get good, you can picture the end goal and you feel the timeframe is bearable, next ask: Am I willing to go through this dip in motivation in order to get to the good bit? What are my parameters for this – what do I need to see by when to know that I gave it my best?
Alternatively, if in the first question, you answered that you can’t see it getting better, then that’s ok too. You save yourself a great deal of anguish either way, because you’ve accurately assessed the situation and your own appetite for difficulty.
COVID-19 has changed the curve of this dip. Perhaps you feel like you’ve gone backwards, that the dip has deepened, that your peak is smaller, or the journey to success has been pushed out by several years.
Blind optimism isn’t helpful, we need to reassess and make decisions based on today’s reality.
This goes for founders, funders and boards. Yesterday’s time and money has been spent and our planned strategy may no longer be relevant.
Are you, your board, and your funders willing to go through the COVID-19 caused dip? What would indicate the other side of the dip for you all? What time frame are you working on? The answer to these questions may be different for each of you. That’s why it’s important to have the conversations, and that it is honest.
The chance to reset
Our CEO, Annie, has a great analogy for the overwhelming change facing our business model:
“It’s like our house burned down. And in shock, we had to grab what we could and find somewhere to set up camp. Looks like we’ll be camping for a while, so let’s get the campsite in order, but let’s also dream about what our new house should look like together by the campfire.”
This has been such a powerful visual for many of the businesses we’ve been working with. The old model is gone, we need a temporary plan for the near future, and a longer-term plan for how we want to live in the future. It might also provide some perspective on the previous point about deciding whether to continue or not.
Continuing this analogy, some questions to ponder by the campfire; how happy were you with the old layout? Was it fit-for-purpose? Were you doing things because “we’ve always done it this way”? Were your outputs and outcomes making a meaningful contribution towards your vision? If there were no limitations, what would like it to look like? If the past had no bearing on the future, would things look somewhat the same or completely different?
While we’re grieving the loss of ‘normal’ and what normal was, is this also a time where we have the chance to genuinely dream and create. That’s not to say that rebuilding won’t be draining, but it also gives us the chance to reset. Reset our mission, our impact model, our business model, our financial model, our testing, our communication, our outlook and disposition.
Don’t try climb the mountain, just take the first couple of steps
The last point on finding motivation is to not try and tackle it all at once. COVID-19 has meant that businesses, industries, communities and even cities and countries have had to completely pivot for survival. For example, some of our partners in Fiji shared that the country shut down overnight as a result of their primary industry – tourism – was shut down. Closer to home, in Australia, we’ve seen trade relations for our country’s key exports threatened as well.
It’s also changed the way we work at a micro-level. Managing phone calls, zoom meetings, kids at home, news updating several times a day with more bad news. It means for a lot us, there’s not one big chunk of time to sit down and knock something over. You will have to do things in pieces and perhaps not always in a great headspace. ‘Chunking’ tasks make these new initiatives easier to process, and more gratifying to tick off.
Customer interviews are scary, until you break the process down into thirty little tasks. The first and only thing you need to focus on right now is thinking about what you want to find out. Only when that’s done do you worry about building your list of questions. And only once that’s done do you worry about 1 or 2 people you feel comfortable talking to… By then, the fear will likely be gone, and the process will flow almost by second nature.
Building a website is hard, until you identify the forty small components you need to assemble. What are your stakeholders coming to your website to find out? Break it down into individual web pages and work on one at a time.
Creating a new business model is daunting, until you see it as a series of low-pressure drafts mixed in with some straightforward tests.
Consider how pricing, margins and value interplay
We are working with one entrepreneur who is in the middle of a complete rebuild after COVID-19 stopped all of her 2019 revenue streams. Currently, she’s conducting customer interviews to test a range of new products and we’ve been discussing how to recognise the value of each customer, but there’s a broader lesson we can glean here.
In effort to win business and ensure our pipeline is filled (especially, when COVID-19 threatens otherwise), we see entrepreneurs lower their prices and thus compromise their margin. They’re trying to please everybody – meeting smaller budgets, persuading sceptical customers, or worried about the ‘mates rates’ trap. The problem is, this usually leads to ongoing loss.
It’s really hard to navigate pushback on price from potential customers when you feel like you haven’t established your reputation yet, but there is still a spectrum of high value to low value customers and it’s worth considering how much effort you give them. It helps to think about the future of the relationship and what it could lead to.
More often than not, our insecurities about pricing our products/ services come from our relationships with other people, rather than worrying that we’ve misread the market. It helps to remember, there will always be someone who thinks you’re too expensive, and don’t risk your livelihood for your reputation to those who won’t matter long term.
We use a process called Facts vs Fake News to separate the stories we tell ourselves from the objective truth. Set up three columns on a blank page. Leave the first blank for writing the statements that are flying around your head. The other two columns should be titled ‘facts’ and ‘fake news’. For each statement you write down, separate out what is the fact and what is the story you might be telling yourself. Think about the data – what have your customers said in the past? What do your past sales and interactions tell you? When you consider the fake news think about how much meaning you have attached to this story. Is it true?
For example, you might tell yourself that if you don’t lower your prices, you’ll lose the business to them and others. This would look like:
|“I’ll lose this business if I don’t reduce my price and they’ll tell other people I’m expensive and I’ll lose even more business”||The client told me that their budget was $400 and my quote is $500|
They have said they are impressed with my work and they would really like to work with me
I’ve been polite and friendly in my communications so far, and we’ve established a good relationship
|They don’t think I’m worth what I quoted|
They will talk about me behind my back with others
Through this process, you can see that it becomes about the work, rather than you, and also encourages honest communication and suggests a way forward. In this situation, what could you remove from your quote to ensure it meets their $400 budget? Or is there a payment plan that allows you to split the cost into two payments on commencement and completion of the project?
The book Tools Of Titans features a wonderful analogy from Newt Gingrich:
A lion is fully capable of capturing, killing, and eating a field mouse.
But it turns out that the energy required to do so exceeds the caloric content of the mouse itself.
So a lion that spent its day hunting and eating field mice would slowly starve to death.
A lion can’t live on field mice.
A lion needs antelope.
Antelope are big animals.
They take more speed and strength to capture and kill, and once killed, they provide a feast for the lion and her pride.
A lion can live a long and happy life on a diet of antelope.
The distinction is important.
Are you spending all your time and exhausting all your energy catching field mice?
In the short term it might give you a nice, rewarding feeling.
But in the long run you’re going to die.
So, ask yourself at the end of the day, “Did I spend today chasing mice or hunting antelope?”
This extends on the idea in the previous point of which customers to focus on, and there are some interesting things for a business owner to consider here. Especially in relation to the significantly altered conditions that COVID-19 has created.
The first consideration is whether or not you’re interested in hunting mice at all? Newt Gingrich is right, mouse hunting isn’t sustainable, but it can help solve an immediate hunger and keep you going while the antelope are away. You might also find that the mice actually lead you to antelope – for one of the businesses we’re currently working with, one of their customers has led them to a larger, longer term customer where they previously didn’t have a relationship.
The second consideration is whether or not you’re equipped to hunt antelope. Chasing an antelope requires different skills and strategies and more power than chasing twenty mice – do you have what you need to hunt antelope at the moment? Maybe during COVID-19 your focus is on retaining your existing customers and relationships, rather than exhausting your resources on finding new customers and developing new relationships.
Alternatively, the third consideration is whether or not there are even antelope around? To paraphrase Rory Sutherland, it helps to know what side of the Savannah they’re on. Antelopes are scarce right now but maybe there’s something else that is equally filling and available. Contrary to the last point, maybe the customers you used to serve aren’t your current customers. Instead there is a whole new set of customers who are interested in your products/services (or more importantly your assets) for different reasons.
Finally, maybe you’re not a lion at all. This is an analogy and it isn’t perfect for every industry. What would be a better metaphor for your style of hunting? It might also be a reflection of your personality; maybe you need to recruit a lion who can either teach you or hunt on your behalf?
One of the entrepreneurs we’ve been working with has done a fantastic job of staying connected to her network during the crisis which has allowed her to adapt rapidly as the situation evolves. Initially it started as a way to check in and respond to new arising needs. But the more she interviewed, the more she realised that there’s lots of people in the same boat as her – people with time on their hands, because business has slowed, but a drive to find new ways of doing business – new projects, partnerships, initiatives.
Similarly, at TDi, we’ve been immersing ourselves in conversations with our friends and partners to discuss how their industry will be affected or is looking to recover, what will philanthropy focus on moving forward, what industries or jobs will emerge or boom as a result of COVID-19, where is the government spending money, what are some of the frameworks that research bodies have built that can help us move forward.
You don’t have to have or the answers, and you don’t have to be able to execute them all by yourself either. Ask, who are some thought leaders that I can gain perspective of? Government? Philanthropy? Industry? On the ground, who’s in my network and who’s going through something similar? Can we join forces to create a new kind of response or product for an emerging market?