In entrepreneurship, nothing goes as expected. No amount of research and preparation can ensure that a business goes according to plan. This has never been truer than during the past year, as startups battle the impact of COVID-19 in addition to the ordinary challenges of launching a company.
At Wilbur Labs, my team and I recently surveyed 150 founders onwhy startups fail and found that 70% faced business failure at some point. Among those who attempted to pivot, 75% succeeded. Bob Dylan got it right when he sang about times of change: “you better start swimmin’ or you’ll sink like a stone.” Founders who are willing to adapt their plans have better odds of preventing business failure.
That’s why I believe that adaptability is the most important quality in a founder. It’s also a skill that anyone can develop and exercise. I’ve seen first-hand how three specific tactics can help any founder adapt effectively.
1. Reframe challenges as opportunities
Companies and their leaders are defined by how they respond to crises. When founders look back on their experience, the “war times” will stand out, not the days when everything went according to plan.
For me, that helps put it all into perspective. Every challenge is a chance to define the company’s trajectory and often brings unforeseen opportunities — even in a pandemic.
A pandemic might seem like a hard time to start a company, unless we flip the script. Arguably, there have never been more problems that companies can help solve.
My team and I are working on more new companies than ever before and putting them through what we call the “COVID lens.” We map consumer behaviors years out, not just in the short term, and look for the opportunities created by new, growing challenges.
Spaces we looked at before the pandemic, like Medicare insurance, real estate, and education, each have new, unique challenges that are becoming larger opportunities as a result of COVID-19. Adaptable founders are more likely to look past the fog and spot opportunities like these.
2. Focus on what you can control
When plans break down, it’s easy to get overwhelmed by the decision of what to do next. While certain items fall beyond a founder’s control, there are always key areas they can control, including how to prioritize and triage the next steps.
For that reason, there is nothing more tactically important than narrowing the focus to the most potentially impactful items and strategies.
When COVID-19 arrived last spring, my team went into protection mode of our people and portfolio. On the people side, we could ensure that our teams were as comfortable and productive as possible while working remotely. We gave everyone a $1,000 workstation stipend, and IT worked with them to plan and order the equipment they needed.
On the portfolio side, every company shifted attention to direct impact from COVID-19 or critical growth opportunities. We cleared out calendars and scheduled daily meetings with company leaders. We also threw out all annual OKRs and roadmaps.
Existing KPIs and year-over-year metrics were no longer relevant, so we built new dashboards to track metrics that we could react to and control more effectively.
For example, the travel industry saw a 50% drop in international trips in January 2020 as COVID-19 spread in Asia and Europe. The US was clearly next. For our portfolio company VacationRenter, a vacation rental metasearch engine, the team began tracking cancelations and booking nuances such as “time to check-in” — the time between booking a trip and checking in for it — to better gauge customer behavior and anticipate cancellation or refund trends.
By monitoring this new data, the team was able to quickly adjust product and marketing strategies, including rolling out flexible cancelation filters and expanding socially-distant travel options like RVs, all of which led to them driving over $1 billion in 2020 gross bookings.
3. Zoom out
In a few years from now, how likely is it that founders will be focused on the same issues they face today?
Sometimes, founders confronting significant challenges get trapped in short-term catastrophizing. Their problems feel eternal and unsolvable rather than temporary and manageable.
By taking a broader perspective, we can give ourselves the openness and confidence to adapt. We can gain enough perspective to change one thing at a time rather than change 100 things at once, chased by anxiety and uncertainty.
When I speak to potential founders, one question I always like to ask is if they are committed to working on the company for 5+ years. In truth, that’s not much time, and most great companies take much longer to build.
When you have a long-term vision instead of a six-month plan, rough situations feel less threatening and more navigable; the pandemic — and whatever disruption arrives next — looks like a bump in the road instead of a collapsed bridge.
My co-founder Phil and I talk about a 50-year vision for Wilbur Labs. By thinking and planning for the long-term, it’s infinitely easier to reframe challenges as opportunities and focus on what you can control. You can make steady progress without reacting disproportionately to the inevitable bumps along the way.
The only guarantee is needing to adapt
Challenges will continue to confront every founder, and adaptability will separate lasting companies from the pack. Founders who frame opportunities as challenges, focus on what they can control, and zoom out will have an edge.
Whatever challenge your startup faces, adaptability will improve the odds of survival.