By Jacob Wedderburn-Day, CEO and Co-Founder of Stasher聽
Rewind to January 2020: Stasher, the company I co-founded 4 years ago, the summer I left University, has just raised $2.5m. The funding round makes the front page of TechCrunch. We move into our first private office and our team throws us a surprise celebration. Jack, our first employee, makes an emotional speech to say thanks for the journey so far and shares how excited everyone is for 2020.听
It is, without a doubt, one of the happiest periods of my life. I am also so excited for 2020.听
Fast-forward to March
Fast-forward to March鈥娾�斺�妕he coronavirus hasn鈥檛 yet rocked Western Europe, but it鈥檚 about to. The weekend before, I鈥檝e read Sequoia鈥檚 letter to their founders about the Black Swan that is coronavirus. It鈥檚 in the vein of their famous RIP good times presentation. I鈥檝e also just had a call with a great advisor, Sean, who recommends I send out a cashflow update and contingency plan to my investors ahead of things becoming more serious.听
鈥淚f it鈥檚 nothing,鈥� he said, 鈥渢hey won鈥檛 judge you harshly for being cautious. If it鈥檚 something, you鈥檒l be ahead of the curve.鈥�
That was excellent advice.
A few days later, I鈥檓 at a conference, talking to our friends at Guardhog and I get a first-hand rehearsal of Humphrey鈥檚 later presentation.听
鈥淲e are standing on the shore and the tide is going out, but not everyone realises that an absolute tsunami of sh*t is about to hit us,鈥� he says, melodramatically.听
鈥淵ou really think it鈥檚 that bad?鈥�
鈥淚t鈥檚 worse.鈥�
That was the last conference the Excel centre held鈥娾�斺�奿t closed that same evening. Now it鈥檚 a Nightingale hospital.听
The government and the NHS have done a remarkable job with projects like the Nightingale hospitals. The toll on the nation鈥檚 health will only make itself felt in the coming weeks鈥娾�斺�奿t鈥檚 times like these you feel very grateful for a public service like the NHS.听
How bad is it?
It鈥檚 funny to reflect on the optimism that still pervaded that travel conference, even then鈥娾�斺�奿t took place 10 days before the UK officially went into lockdown. I suppose that鈥檚 an inevitability when you gather a lot of entrepreneurs together. It鈥檚 in our nature to be optimists鈥娾�斺�奿n fact, fighting my innate optimism has been a recurring challenge of this crisis.听
Objectively, the coronavirus is terrible for my business. There鈥檚 no two ways about it.听
We鈥檇 originally founded Stasher as a solution to the problem of short term storage. By far the clearest short term storage use-case was in travel鈥娾�斺�奻or luggage storage. Airbnb was exploding in popularity, travel was booming鈥娾�斺�奿n every investor pitch I鈥檝e ever given, I鈥檝e talked about what an amazing market travel is. It鈥檚 growth was so continuous鈥娾�斺�奿t almost seemed future-proof.听
Now, not only are travel and tourism severely limited, the stores and hotels we rely on to provide storage are mostly closed due to mandatory lockdowns. Even when they can re-open, speculation by travel industry experts is that the industry itself will take a lot longer to recover.听
So what can we do about it?
A crisis mountain
Nobody is untouched by the coronavirus. The winners and losers that it has thrown up are fascinating: I continue to see interesting trends where some businesses are doing extremely well from it, and some are adapting relatively well or putting on a good show of adapting. Many, on the other hand, are really hurt by it. We fall into the latter camp.听
There have been crises before and there will be crises again. Apparently, people said 9/11 would be the end of travel, with airlines being grounded across the world for more than a week. I barely remember 9/11. I have a vague memory of seeing the news that day and sensing how distressed all the adults were.听
I was old enough to have some understanding of the financial crisis of 鈥�08, though I was still in school. I hadn鈥檛 yet started studying economics, though the crisis was certainly a factor that pushed me to do so. It probably motivated me to continue studying it through into University and ultimately led me to where I am today.听
But this is my first real crisis. And by all accounts it seems like quite a big one.听
Sure, there have been internal crises that we鈥檝e faced during our time running Stasher鈥娾�斺�妌o business is without it鈥檚 ups and downs and moments of existential dread. We weathered a week where we mysteriously disappeared from Google. We鈥檝e weathered investors pulling out of funding rounds late-on and contracts falling through and all manner of disappointments that seem mountainous at the time.听
This really is a mountain.
鈥淚t鈥檚 lonely at the top鈥�
One of the hardest things about being a founder is that, in Ben Horowitz鈥檚 words, it鈥檚 鈥渓onely at the top鈥�. I鈥檝e always been grateful that Stasher is a joint effort, shared with my brilliant co-founder, Anthony. It makes it a lot less lonely having someone else to share decision-making with.听聽
Nevertheless, the meaning of that phrase becomes clear in a crisis.听
When times are good, being a founder is a dream. You鈥檙e excited to go to work everyday, you get a lot of public credit for your successes, and you get to feel permanently proud of what you鈥檝e created. It is a really creative pursuit; it鈥檚 a daily exercise in problem-solving. Frankly, for me, it鈥檚 the best job in the world.
When times are bad, that changes. Everyone looks to you for guidance. You suddenly feel very conscious that you are one-step removed from your team. In the good times, you can have a very friendly culture and a close team dynamic. In the bad times, the hierarchy makes itself felt.听
I鈥檝e found a number of things challenging about this period鈥娾�斺�妏ersonally and professionally鈥娾�斺�奱nd I feel they鈥檙e worth sharing. Not because they鈥檙e unique or original鈥娾�斺�奿n fact, quite the opposite. These are problems a lot of young founders must face.
The 4 challenges
- Being close to your team is hard in a crisis.听
I鈥檓 biased, but I love the culture we created at Stasher. We鈥檝e tried to be very deliberate about the values we uphold and the policies we have adopted. A consequence of this is that the team you build becomes very close-knit.听
In a crisis, the gulf between you as a founder and your team suddenly opens up. I try to be mindful of it normally, that the relationship I have with my team is fundamentally one of employer to employee鈥娾�斺�奲ut it鈥檚 hard to keep that in mind when, in practice, everyone is very friendly and you鈥檙e all sharing this journey together. You can鈥檛 help but see your colleagues as your friends.听
At times like this, when you have to make tough calls about pay cuts or鈥娾�斺�妛orse鈥娾�斺�妉etting people go, it鈥檚 especially tough and you feel like you risk tearing at the fabric of the culture you have woven. The UK鈥檚 furlough scheme has so far enabled us to retain everyone, albeit on reduced salaries.听
- Getting the right advice is hard in a crisis.听
Especially in this crisis, there is an abundance of information, but a lack of good information. Our typical KPIs have gone out the window, to be replaced by crisis management stats. Whereas before growth was the King of metrics, now it is cashflow. Getting good metrics on the market and the travel industry as a whole is also a challenge.听
It鈥檚 in times like this that the value of your advisory network makes itself felt. A lot of people have opinions鈥娾�斺�奱nd are happy to share them鈥娾�斺�奲ut frankly, nobody has a clue what鈥檚 going to happen. People are bad at making predictions at the best of times鈥� right now it鈥檚 all speculation.听
Nevertheless, I鈥檝e tried to surround myself with people who i) know our industry well and ii) know how to manage a business. It鈥檚 their advice I am leaning on the most to inform my decision making. Older mentors, who鈥檝e lived and managed their way through prior crises, are especially good for perspective.听
- Making the right cuts is challenging
Spending money is much more fun than saving it. One of the perks of raising money is that you get to make ambitious plans for how to spend it. We had built up a spending plan with a 6-figure monthly cost base.听
We鈥檝e cut that back aggressively. We鈥檝e axed every possible cost that we can. The UK government鈥檚 furlough scheme is a blessing in this regard. We鈥檙e a relatively lean and asset-light operation; our team is one of our main cost centres, and the furlough scheme has saved us a lot of money.
You have to be ruthless and unsentimental about making cuts. We had to give notice on the new office that we鈥檇 just moved into and decorated, which was a shame, but in the grand scheme of things, it鈥檚 the practical thing to do. We鈥檒l probably be working remote for the best part of this year until social distancing eases and the business can sustain an office again.听
While travel is severely limited, we have effectively flicked the switch on our marketing spend. For other businesses, this could be a bigger challenge. You have to spend money to make money. The challenge lies in getting the right mix.听
- Prioritisation is hard鈥娾�斺�奺specially in this crisis
One of my favourite things about being a founder is that you get to manage your own time and set your own agenda. Sometimes, that鈥檚 challenging. Normally, it鈥檚 because there are too many things you鈥檇 like to work on and you don鈥檛 know where best to prioritise your efforts.
Now is a weird time鈥� I sometimes feel overwhelmed with things that I could be doing鈥娾�斺�奱nd then I re-evaluate, question which of them is really impactful, and realise there are only so many genuinely useful things to prioritise right now.听
Prioritisiation
I figure it鈥檚 worth quickly diving into the last point. For me, the main priorities I have right now are:
- Manage cashflow. Cut all costs鈥娾�斺�奱nd then, once I鈥檝e cut them, re-evaluate and see if I can cut even more. The only goal I have for this year is that Stasher survives way into 2022, even if we make no revenues. Thanks to the sacrifices we have all made and the support of our investors, we will definitely survive. I am very grateful to have such an understanding team and such supportive backers.听
- Improve our product! It鈥檚 rare to have this time where we don鈥檛 have customers (or colleagues) distracting the product team鈥� now is a unique opportunity to focus. I鈥檓 proud of what our product team have already accomplished in April. At the end of this, the apps will be of a much higher quality than they were before.听
- Business development鈥�鈥斺�奱 lot of people in our industry suddenly have a lot of time on their hands. It鈥檚 been a good chance to touch base with existing and potential partners, and with competitors, and build relationships.听
- Keep in close contact with team/investors鈥娾�斺�奍鈥檝e been providing regular updates to our investors, at twice the normal frequency. The team still working has a video call every morning. The team on furlough we chat to once a week, socially, to let them know what鈥檚 going on, play games and see how everyone鈥檚 holding up during lockdown.
- New revenue streams鈥娾�斺��now is quite a good opportunity to be creative. We鈥檙e going back to the drawing board in a way that we haven鈥檛 done for a long time to re-imagine the problems we can solve. There will be a lot of new problems in the post-coronavirus world.听
- 鲍辫蝉办颈濒濒鈥�鈥斺�奍鈥檝e put more time into skills I wanted to develop, particularly around coding and spreadsheet automation.听
Silver linings
As a closing thought, people talk about how in every crisis there is an opportunity. In another article, I鈥檝e covered the possible social change this crisis could catalyse. This crisis offers a rare opportunity for reflection.听
As a founder and an entrepreneur, you become very focused on the company you run. I鈥檝e lived my life for the last 4 and a half years with Stasher on my mind and always with an eye on how best to grow it.听
Now is a rare chance to step back from it all, rest and re-evaluate. These are tough times we are living in, but there will be opportunities for sure. As a founder, every setback is in itself a valuable experience and I can only imagine that my future career will be enhanced from having gone through a crisis like this at a young stage.听
Bio
Jacob Wedderburn-Day is the founder of Stasher鈥娾�斺�奱 travel tech startup that connects travelers looking to store luggage with shops and hotels providing storage space. Jacob and Anthony, friends from their time studying economics at Oxford together, co-founded the business in 2015. They have grown it from the initial idea back when they were students to being a venture-backed company, valued at over $12m, present in 250 cities worldwide. They were both recognised this year on Europe鈥檚 Forbes 30 under 30 list.
