Former Uber Exec's Tips to Entrepreneurs on Surviving a Bear Market Emil Michael, former Chief Business Officer of Uber, shares hard-earned lessons about navigating tough economic times.
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Battling a bear market can feel like shouting into a heavy gust of wind for business owners. But Emil Michael, former Chief Business Officer of Uber, says there are ways to navigate a poor macro environment to survive and even thrive. If you are a founder, his advice for cost-cutting, team-building, innovation, and time management is invaluable.
1. Expectation resets
"The hardest thing to do is to cut your costs now — not for survival today, but for survival tomorrow. Leaders have to reset their expectations on everything and bring their team along," advises Michael. "This includes timing it to an IPO, hitting previously set revenue milestones...everything. You have to let go of the past."
Cost-cutting may be a bitter pill to swallow, but the goal isn't about mere survival. It's about creating a leaner, more adaptable organization that can weather the storm and pivot to the top when the conditions become more favorable.
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2. Strategic prioritization of target customers
The key is to conduct rigorous analyses on where you should focus. "For example, if we need to achieve $50 million in revenue in three years, should we pursue 100 potential customers or focus on 20?" asks Michael. Such questions must be asked, analyzed, and acted upon with the involvement of all department heads and executives.
3. Assume no funding
Founders should proceed under the assumption that raising additional funds in the next 18 months will be near impossible unless they already have a clear product-market fit, advises Michael. It necessitates that companies have a runway of 24 to 30 months of capital left, ensuring they can weather the storm.
He suggests cutting more than you want to, which often means "cutting into bone." Once some stability returns, you can rebuild almost anything you have cut during a bear market.
His remarks underline the importance of balance: trimming fat to survive the downturn, but preserving the core strength and structure of the organization to bounce back when circumstances improve.
4. Promote from within
"You should find the hidden talent in your existing young leaders versus getting the 'name brand' outside talent who are set in their ways of doing things," says Michael.
On the culture front, a seasoned exec from Amazon might be so disconnected from the fight for product-market fit, that the cultural difference could prove detrimental. Leadership must build a culture that places product-market fit at its core; encouraging innovation, adaptation, and tenacity in the face of adversity.
It's a moment for the current team members to step up, take on more responsibility, and accelerate their personal and professional growth.
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5. Your calendar should look different
Reflecting on the pre-pandemic era, Michael emphasized that a CEO's calendar might reflect courting investors for funding rounds that aren't in the near future or attending industry conferences. Now, he believes founders should be the "problem solver-in-chief", laser-focused on overcoming immediate challenges.
Time allocation for meetings should be reduced (can a 60-minute meeting be done in 45 minutes? Can a 30-minute phone call be a 15-minute chat?), making room for more efficient decision-making and problem-solving. "Don't give me the preamble; give me the problems and the proposed solutions" should be the mantra in this new reality Michael says. Decisions need to be made faster, with preparation done ahead of meetings to maximize efficiency.
6. Constraints breed creativity
Emil Michael argues one must harness the power of a timeless human truth: constraints can, paradoxically, breed creativity. This becomes particularly relevant in difficult times. By empowering less experienced team members with more scope and responsibility, you unlock the potential of some of the most creative minds in the room.
"The heart of these tech companies are younger folks," Michael explains, emphasizing that their energy, ambition, and innovative spirit can be instrumental in defining the company's trajectory. With the right balance between focusing on the existing product line and carving out space for new ones, companies can "live to fight another day."
It's a delicate balancing act— if competitors over-invest in the future without paying attention to the present, they might falter before reaching the intended destination. Hence, nurturing creativity within constraints can ensure a company's survival and, ultimately, lead to a thriving future.
7. Be honest with yourself
"Entrepreneurs should really ask, 'Do I really, really have product-market fit?'" offers Michael.
A viable product is one that people are willing to pay for, directly or indirectly, and which can generate a profit within a reasonable timeframe. It should also possess the growth characteristics of a high-growth company if it is venture-backed.
If you don't, your focus should be squarely on achieving it.
Balance now to thrive later
Emil Michael's career and investing journey provides a compelling playbook for dealing with bear markets. At its heart, it's about balancing survival today with success tomorrow. This delicate dance, mastered by few, can be the difference between companies that are merely surviving, from those truly thriving.
For a deeper dive or personalized advice, grab time with Emil Michael by booking a one-on-one mentor call on Intro.