A startup's alternative to panic: take control

The past two weeks have been a serious bear for those of us in the Startup world. VCs are advising their companies to hunker down and cut, raise whatever they can, merge, and try to hang on. Startups are taking preemptive measures and laying off staff--others are rushing to close whatever deals they can at their current valuation or just below.

Yes, there are clear and common sense business management measures everyone should employ but keep in mind that much of what's about to unfold is not just about business but--and sometimes even more so--deeply influenced by people's psychology, framing, and ultimately--having a sense of control.

Research in behavioral and leadership psychology has long demonstrated that people who have a greater sense of control over their lives and over situations are more likely to succeed, survive difficult situations, and be healthier all together. Being healthy is a good thing these days, especially in the light of recent surveys which show that stress levels and illness are on the rise among Americans.

So what can you do to gain a greater sense of control over your life in these uncertain (and bound to get tougher) times?

1) Reframe. Instead of thinking of this as a time of darkness and doom, think of this as a time of opportunity.

Think about what you CAN do: Are you being as lean as possible in your use of resources and cash? What can you do without?
Think of this as Spring Cleaning having arrived in October: Go through all your "business closets" and clear them out. Look again at your financial model, your revenue model, your target customer, your product development plan.
Reassess: Having planned for massive and global success just a couple of years back--are you perhaps missing an opportunity that might be staring you straight in the face--right here, right now?

Don't be afraid to take a step back and take a good look at your business. Flexibility is power in these uncertain times--try to band a dough sneak and you can shape it into anything you like. Try to do the same with a hard pretzel and you're left with crumbs.

2) Remember that where attention goes, energy flows. If you focus on all that's going wrong in your business, your industry, Silicon Valley, and for that matter, the world--you'll begin to attract even more negative experiences. True--being able to blame external factors is a good excuse for failure--but ultimately, that's not where you want to be. So. Focus on what you DO have. Are you working with really cool people? Is your angel or VC being supportive of you? Did you just release an update and it's doing well? Did you acquire more customers today? It may seem little or mundane--but notice how, when you focus on even the littlest positive change, you tend to draw more of the same.

3) Focus, focus, focus. Let's face it--many companies and VCs (not you of course) have been a bit lax on strategic focus these past few years. Companies with as little as an idea secured funding with a handshake, the word "advertising" has been synonymous with profit, and CPCs, CPAs with free money. The next few quarters are going to tell who's got it and who's, well--a fake. This is the time to focus!

Focus your product offering--who is it for? Do they really want it? Can they pay for it?
Focus your application--choose key feature and functions that are the most critical to the user experience. You don't need to include the world--just those key capabilities that are going to make the most difference to the customers that matter most.
Focus your distribution: choose the distribution that will lead to the highest, most targeted reach, and to volume customer acquisition.

4) Get clear, get niche, get to be 5 years old again. Take a look at your offering and its relevance to your target market, if you have one. Can you clearly identify how your product is different from other products? Can you clearly describe to whom your product is most valuable? How it is a pain killer rather than just a colorful vitamin laden gummybear? If you can't--you're in trouble. A mentor once told me to always do the 5-year old test. If a 5 year old can't get what you're saying--go back to the drawing board, he'd say.

5) engage others. You probably have lots of friends who are CEOs and have an angel investor or a VC is backing them up--whatever your circle, ask for help. Research shows (here's one example) that when medical patients engage a support system during difficult times they are much more likely to heal faster, leave hospitals sooner, and survive life threatening diseases. Right now--we're in a bit of a triage. Go meet with people, don't barricade yourself in. You'll find that others will appreciate the conversation and you'll be able to share ideas and together put rumors to the reality rest. More than anything--it'll give you and others a sense of sanity and direction in what has become a very messy situation.

Bottom line--there are clearly objective reasons for concern and for taking business measures to help you maintain position in the coming months. But equally important is your state of mind and that of the people around you. Staying healthy, reframing negative thoughts, taking proactive measures, and connecting with others are few but key ways that enable you to take control and shape how your business will fair in the coming months.

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