Tell us a bit about how you reacted to the corona situation with your business?
We reacted in two different ways:
Firstly, we tried to save our cash reserves as much as possible (e.g. by reducing hiring) to reduce our burn rate and to ultimately extend our runway. Secondly, we adapted our product features to cater even better to the needs of our users given the current circumstances. Taking a mid-term perspective, the Coronavirus might be even advantageous to our business since we’re operating in the digital health industry and are bringing healthcare for 2 billion people worldwide with chronic skin conditions to their smartphones.
What was driving the decision to act this way?
We figured that receiving additional funding from VCs would become more difficult in the near future as they will focus on increasing the runway for their existing portfolio ventures. This is due to the fact that the M&A market is probably going to be rather inactive for the next 1-2 years as corporates and possible buyers are focusing on saving their core business right now (instead of thinking about new acquisitions).
As a result, we intend to save our cash reserves as long as possible. In terms of product, we had to adapt our set of features slightly as we’re definitely going to deal with Corona for quite some time.
How did the process of getting the decision differ from business as usual?
To be honest, the decision process wasn’t that different from the usual one. We precisely evaluated the implications of Corona across all business-relevant dimensions, i.e. on our products, users, funding, strategy, etc. Based on our findings, we then concluded our decisions on how we should move on (see above).
What do you personally learn from this experience?
Learning 1: Remote teams are an asset.
We’re distributed across 6 countries including India, Italy, Switzerland, France, Sweden, and the Philippines. Digital tools such as Slack, Zoom, and Google Drive were already implemented and ready-to-use which is a big advantage. Also, the level of trust you need to work mostly remotely is already in place since the beginning. I’m quite convinced that “remote-first” will become a more prevalent company/startup set-up in the years to come.
Learning 2: Adapt (but do not “over-adapt”) quickly.
The ability to adapt quickly to particular circumstances across all aforementioned dimensions (product, funding, user, strategy, etc.) is key. However, do not “over-adapt”, i.e. make sure that you still follow your core plans and strategy with slight adjustments due to Corona. I’m not sure if a 100% pivot towards a “COVID-product” would be the right way to go as (i) there will be many jumping on that bandwaggon right now and (ii) a crisis is most likely not the ideal time to start from scratch (as opposed to working on an idea that is already, at least in parts, de-risked due to user feedback/interviews, PoCs, beta tests, and some initial market traction).
What is your message to business leaders that are struggling at the moment?
My message to myself (and thus to all other founders) would probably be to apply common sense, i.e.
(1) re-assess the roadmap and strategy given the new circumstances,
(2) adapt and cut out irrelevant things and then
(3) focus relentlessly on executing that strategy.
Especially number 3 is important: keep on working with the same discipline and enthusiasm as usual and don’t distract yourself too much.
After all, remember two things:
· Everyone has to cope with the Coronavirus right now – as a business as well as a person. You’re in this together with over 7 billion people.
· Have some fun. You’re building a great product with great people. Enjoy the ride!
Whom should we interview next?
I would love to boost the digital health/therapy industry a bit, therefore I suggest:
· Michelle Heppler, Pathway
· Luiza Dobre, Komed Health AG
· Gloria Seibert, Temedica
· Jesaja Brinkmann, Cara Care