Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at email@example.com.
Q. I’ve been working on a new product. Now, with the coronavirus, the major market it’s designed for is shut down. I have another idea, which capitalizes on the current situation, but it’s not as “big” of an idea. Which should I pursue?
It sounds like you have two good ideas. But market timing appears to be a big issue for your first idea, so it may make sense to reserve cash and put a pause on the rollout plan. You don’t need to step on the gas when no one is going to buy your product.
That said, you can still work on the idea—use this quiet time to build behind the scenes and ensure that you come out of this pause in a better position. The key is to find a way to make sure that once the market opens, you will be ready with a strong offering.
On the second idea, it sounds like it could be a hit for the current environment. I suggest that you test it further and potentially aggressively attack it. It’s probably not going to be a strategic product for years to come but more of a timely offering for the present situation. If your ROI is such that you can get a return fairly quickly, it may make a lot of sense to chase. Good luck!
Q. I need some advice about how to manage layoffs. How bad is this going to be on our culture?
—First-time founder who has never been through a downturn
I’m sorry that you are in this situation. Most of the time you are in this position it is because the strategy or the execution of the plan didn’t go well, and your competitors are outperforming you. In most cases, the source of the pain is more self-inflicted.
But this is different. This pandemic is creating issues that are having horrific consequences on industries, companies, and ultimately, people. Many companies are facing a difficult conundrum: do they preserve jobs, or do they preserve the entity? As companies contend with their own survival, they have to trim more and more expenses and that often means reducing headcount as well as other things. You want to continue to employ these people, but you simply can’t afford to so it’s likely you will have to do a layoff.
Put this into context of why it is happening and treat everyone humanely. Always act with dignity and respect. Show compassion but do not make this about you and how hard this is for you. You are the leader and you won’t get sympathy. In some ways you are breaking trust—you gave someone a job and now you are taking it away through no fault of their own. If you have to do this, you’ll soon see why it’s the least liked experience of any executive. You are impacting lives.
- Be strategic in your planning. You only want to do this once. Go as deep as you are going to have to go. Multiple cuts are more painful.
- Give as much notice as you can.
- Change the vesting schedule, so people are vested up to the time they served—it’s not their fault they are not staying.
- Create alumni networks so people can stay connected.
- Help people network and find jobs. I have seen one CEO send notes to his contacts to help people find new opportunities.
- Remember, everyone is watching, and also worried they are next. Communicate what is happening and treat everyone how you would want to be treated.
This is a sad moment for everyone. People who are leaving are going to be upset, as are their friends and colleagues who are remaining. If you have never had this experience before you will see that it takes some time to adjust. But you can help make the adjustment easier by demonstrating leadership and treating everyone with dignity and respect.