Kishwar Hashemee: COVID-19 Decision Matrix For Founders
Lives and livelihoods are both at risk- this is a situation that the wildest dreamers wouldn’t dare to envision. Global pandemic happens once a century, and we happen to be at the receiving end this time. It has already been an arduous few weeks, and there is no sign of slowing down. The worst is yet to come, and what we can do is prepare ourselves.
I hope that after all of this passes, the market will bounce back fast but we don’t know when that is going to happen. We can assume the worst possible scenario and latch on to what we have, so that when better days come our teams can flourish again.
For founders whose businesses rely on fundraising as a key tool to scale and become cash-flow positive (eventually), this matrix below (see a live version here) that I have put together might be helpful.
Every business is different, but what is true for all of us, with the exception of a few, is that the net impact of COVID-19 has been negative.
Why the matrix?
This matrix can help to set targets for your expenses, revenue, and net outflow to prepare for the desired runway. Planning tools in a fast-moving situation can paint the foresight that is needed to protect us from running dry. Data, plan, attack!
How to use the matrix:
- This sheet is view-only. If you want to customize it, create a duplicate and then start editing.
- The light yellow cells represent various monthly burn amounts. These are inputs so you can edit.
- The darker yellow cells are investments that you anticipate raising or have in the bank.
- There are 24 grids with ‘months of runway’ which are outputs based on investment, burn, and possible expansions.
- Cell B1 is the cost of expansion. It can be geographic expansion, new app launch/dev, CAPEX. Generally, stuff that won’t be on your ‘normal’ monthly burn. This is also stuff that you can survive without and contributes to growth.
- Cell B2 is the number of expansions that you plan to do. This can be zero. Remember, the goal is to survive first. Growth is secondary.
- The product of B2 and B1 are subtracted from investment amounts, and then the result is divided by your operational burn to produce months of runway.
- The months have been colour coded by conditional formatting.
- 18 months is healthy because it might take investors 18-24 months to come back.
Kishwar Hashmee is the Founder and CEO at Kludio, a foodtech startup based in Dhaka and a former VP of Pathao where he helped build Pathao operations in multiple cities and verticals from scratch. He can be reached at [email protected]sia.com