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Companies built on bare human essentials will mostly thrive through this crisis. Companies built on nice-to-haves will have a harder time.
It's time to talk about fairweather businesses.
It's time to talk about fairweather businesses.
Nothing against them, but I'm very wary usually when engaging with them, either as an investor or as a provider.
Even before this crisis (I started working before the 2008 crisis, so I know a thing or two), I've only engaged in sound businesses that will be around no matter what
Even before this crisis (I started working before the 2008 crisis, so I know a thing or two), I've only engaged in sound businesses that will be around no matter what
In some cases, I did it without knowing it, but I'll call that instinct. Again, nothing against them: everyone should work on what they love the most. There are some fairweather businesses that will thrive too during the covid crisis...
... either because they've fundraised recently, or because they're extremely profitable and even with a sales decrease they can still make it through. Or better: they can pivot to something of extreme value to someone else.
The fairweather businesses of today are the http://pets.com of the dotcom bubble. Things we don't really need but we pay for because it's trendy or give faux social status. WeWork is at the forefront of all these self-pumped fairweather businesses.
Growth-based investment will not disappear as such, but it'll become the exception, rather than the rule. Investment funds will be looking for companies "close to profitability" or extremely cash-efficient ones.
All this capital that will be freed-up from the market will allow profitable companies to raise insane amounts of money on even more benefitial conditions for them (like Automattic - Wordpress - or Buffer), which will allow them to take over entire markets.
Smaller & sinking companies will be forced to close shop or to sell at a bargain to bigger companies. The so-called market correction will propel bigger companies. We might even see the new Microsoft/Google/Facebook/Amazon coming up in the next five years.
As an investor, I have only been investing in B2B enterprise companies (with two B2C exceptions - they just don't know yet they'll have to turn into B2B 
). Big enterprises always need services, come hell or high water.
). Big enterprises always need services, come hell or high water.
If I had more capital, or knew more about things that are not SaaS/Software, I would invest in health, food and developing countries infrastructure, as I see those as essential investments that will always be there.
I really hope we can all survive this crisis, but come on, some companies were hanging by a thread with their endless pivots, iterations and "lean" business plans. We could also call them self-help startups 
