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  Presently, many economies across the world are experiencing several economic shocks and downturns. It is taking a huge toll on startups and their founders. According to studies by Layoffs.fyi, 69 startups experienced significant layoffs in May compared to only nine in February and four in January.
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This has shown that a lot wrong with the global economy, and by extension, it will affect startups. This downturn could be likened to the economic depression of 2008. In 2008, millions of workers were laid off and many businesses shutdown.  Despite the presence of declining economy, young startup founders, especially those under the age of 35 who experienced economic depression in 2008 as teenagers and children, can deploy strategies to stay afloat. Below are tips that can help young startup founders stand strong and stay afloat in the face of economic downturn. 

  • Strengthen Organizational Trust

To survive a market dip, you need to build confidence in your leadership team. There is need to strengthen and encourage your team to ensure that organization trust is solid. Conversely, when organizational trust is low, there is every possibility that your team will put up a weak front against the storms of the market dip. Furthermore, when organizational trust is low or absent, it becomes a self-fulfilling prophecy that a startup slides down the market. Also, to win in the face of an economic downturn, you need to assure your team members because during times like this, employees get paranoid of losing their jobs. This is the time to build confidence in them, and also avoid finger-pointing in cases where there are poor business decisions.
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Finally, as a leader, you must lead by example by investing in your peer relationship, and encouraging your team.

  • Show Resilience In Leadership 

In economic downturns it is easier to fall into the trap of discouragement. Leaders must exhibit strength and endurance during downturns, and keep frustrations private in order not to scare employees. Of course, during downturns, layoffs or hiring freeze often happens, this period is a time to show compassion and empathy. You must also know that your team is watching hence you must watch your steps and your words and deliberately show resilience and strength. In fact, you must deliberately cutoff distractions and delegate responsibilities to your team and coordinate them well to ensure that the processes are well carried out. However, lead with courage and empathy.  Finally, never get stuck on a task, but call for help, or invite experts. During downturns, emotions can be high, but learn to brainstorm and share ideas. 

  • Invest In Employees With Diverse, Adaptable Skills

During recession, people get laid off; this is the time to remain adaptable and diverse. This is the time to reskill and build adaptable skills.
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This as well should be adapted in the workplace where employees are reskilled to stay afloat. Investing in team’s knowledge is a way of building agile organization. Also, startup leaders must build adaptive measures within workplace. For example, cutting down of expenses and collapsing similar departments into one, to avoid unnecessary expenses. Moreover, startup leaders must help their team to multi-tasks and as well provide tools that help them to do these tasks well.

Final Words

If you’re a startup founder under 35, the thought of a down market may feel overwhelming and as well difficult to overcome; however, economic downturns come and go. What matters most is applying coping mechanisms and strategies while the storm rage and then pass away. How to get around economic downturn is by building an agile organization where the leader displays resilience and strength and leading with courage. Also, it is a time when there is economic depression, you have to build adaptable and diverse measures such as reskilling your team and providing tools that makes changes easier.  Featured Image Source: Business Review
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This article was first published on 16th June 2022

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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