As of March 2020, the Sequoia "RIP Good Times" email had come out three times:
- Terrorist Attacks - September 2001
- Housing Debt Crisis - Fall 2008
- Coronavirus - March 2020
It was a few weeks after September 11th that I got a 📝Battlefield Promotion to CFO. At 📝Affinity Internet, my co-founder and I had raised $60m and spent $47m acquiring web hosting companies, mostly for 3x revenue. We'd already had 2 big layoffs that year, but we were still burning more than we should. Within a few weeks, we'd cut another 40% of the team and held a "Day 1" event for the new company.
With an 📝Empathy Disclaimer as a given, we took it as an opportunity to explore a "cut into the bone" strategy. Why not?
- The 📝Impact on the economy could get much worse than you can imagine.
- No one will fault you for making drastic changes.
- If the economy ends up not that bad, you'll have put yourself in a stronger position to grow after the worst is over.
And before entertaining any conversation about how bad things can get, always remember the 📝Stockdale Paradox.
Questions
How long can we make our cash last?
If you've raised money:
- What would you do now if you knew you could never raise another dollar?
If you are self-funding, it's more personal:
- How far in are you willing to go?
If you are in partnership, both of the above questions, and:
- What if one of us has to carry the business longer than the other can?
Generally:
- What decisions have you been putting off that you should revisit?