By Jacob Wedderburn-Day, CEO and Co-Founder of Stasher
Rewind to January 2020: Stasher, the company I co-founded 4 years ago, the summer I left University, has just raised $2.5m. The funding round makes the front page of TechCrunch. We move into our first private office and our team throws us a surprise celebration. Jack, our first employee, makes an emotional speech to say thanks for the journey so far and shares how excited everyone is for 2020.
It is, without a doubt, one of the happiest periods of my life. I am also so excited for 2020.
Fast-forward to March
Fast-forward to March — the coronavirus hasn’t yet rocked Western Europe, but it’s about to. The weekend before, I’ve read Sequoia’s letter to their founders about the Black Swan that is coronavirus. It’s in the vein of their famous RIP good times presentation. I’ve also just had a call with a great advisor, Sean, who recommends I send out a cashflow update and contingency plan to my investors ahead of things becoming more serious.
“If it’s nothing,” he said, “they won’t judge you harshly for being cautious. If it’s something, you’ll be ahead of the curve.”
That was excellent advice.
A few days later, I’m at a conference, talking to our friends at Guardhog and I get a first-hand rehearsal of Humphrey’s later presentation.
“We are standing on the shore and the tide is going out, but not everyone realises that an absolute tsunami of sh*t is about to hit us,” he says, melodramatically.
“You really think it’s that bad?”
That was the last conference the Excel centre held — it closed that same evening. Now it’s a Nightingale hospital.
The government and the NHS have done a remarkable job with projects like the Nightingale hospitals. The toll on the nation’s health will only make itself felt in the coming weeks — it’s times like these you feel very grateful for a public service like the NHS.
How bad is it?
It’s funny to reflect on the optimism that still pervaded that travel conference, even then — it took place 10 days before the UK officially went into lockdown. I suppose that’s an inevitability when you gather a lot of entrepreneurs together. It’s in our nature to be optimists — in fact, fighting my innate optimism has been a recurring challenge of this crisis.
Objectively, the coronavirus is terrible for my business. There’s no two ways about it.
We’d originally founded Stasher as a solution to the problem of short term storage. By far the clearest short term storage use-case was in travel — for luggage storage. Airbnb was exploding in popularity, travel was booming — in every investor pitch I’ve ever given, I’ve talked about what an amazing market travel is. It’s growth was so continuous — it almost seemed future-proof.
Now, not only are travel and tourism severely limited, the stores and hotels we rely on to provide storage are mostly closed due to mandatory lockdowns. Even when they can re-open, speculation by travel industry experts is that the industry itself will take a lot longer to recover.
So what can we do about it?
A crisis mountain
Nobody is untouched by the coronavirus. The winners and losers that it has thrown up are fascinating: I continue to see interesting trends where some businesses are doing extremely well from it, and some are adapting relatively well or putting on a good show of adapting. Many, on the other hand, are really hurt by it. We fall into the latter camp.
There have been crises before and there will be crises again. Apparently, people said 9/11 would be the end of travel, with airlines being grounded across the world for more than a week. I barely remember 9/11. I have a vague memory of seeing the news that day and sensing how distressed all the adults were.
I was old enough to have some understanding of the financial crisis of ’08, though I was still in school. I hadn’t yet started studying economics, though the crisis was certainly a factor that pushed me to do so. It probably motivated me to continue studying it through into University and ultimately led me to where I am today.
But this is my first real crisis. And by all accounts it seems like quite a big one.
Sure, there have been internal crises that we’ve faced during our time running Stasher — no business is without it’s ups and downs and moments of existential dread. We weathered a week where we mysteriously disappeared from Google. We’ve weathered investors pulling out of funding rounds late-on and contracts falling through and all manner of disappointments that seem mountainous at the time.
This really is a mountain.
“It’s lonely at the top”
One of the hardest things about being a founder is that, in Ben Horowitz’s words, it’s “lonely at the top”. I’ve always been grateful that Stasher is a joint effort, shared with my brilliant co-founder, Anthony. It makes it a lot less lonely having someone else to share decision-making with.
Nevertheless, the meaning of that phrase becomes clear in a crisis.
When times are good, being a founder is a dream. You’re excited to go to work everyday, you get a lot of public credit for your successes, and you get to feel permanently proud of what you’ve created. It is a really creative pursuit; it’s a daily exercise in problem-solving. Frankly, for me, it’s the best job in the world.
When times are bad, that changes. Everyone looks to you for guidance. You suddenly feel very conscious that you are one-step removed from your team. In the good times, you can have a very friendly culture and a close team dynamic. In the bad times, the hierarchy makes itself felt.
I’ve found a number of things challenging about this period — personally and professionally — and I feel they’re worth sharing. Not because they’re unique or original — in fact, quite the opposite. These are problems a lot of young founders must face.
The 4 challenges
- Being close to your team is hard in a crisis.
I’m biased, but I love the culture we created at Stasher. We’ve tried to be very deliberate about the values we uphold and the policies we have adopted. A consequence of this is that the team you build becomes very close-knit.
In a crisis, the gulf between you as a founder and your team suddenly opens up. I try to be mindful of it normally, that the relationship I have with my team is fundamentally one of employer to employee — but it’s hard to keep that in mind when, in practice, everyone is very friendly and you’re all sharing this journey together. You can’t help but see your colleagues as your friends.
At times like this, when you have to make tough calls about pay cuts or — worse — letting people go, it’s especially tough and you feel like you risk tearing at the fabric of the culture you have woven. The UK’s furlough scheme has so far enabled us to retain everyone, albeit on reduced salaries.
- Getting the right advice is hard in a crisis.
Especially in this crisis, there is an abundance of information, but a lack of good information. Our typical KPIs have gone out the window, to be replaced by crisis management stats. Whereas before growth was the King of metrics, now it is cashflow. Getting good metrics on the market and the travel industry as a whole is also a challenge.
It’s in times like this that the value of your advisory network makes itself felt. A lot of people have opinions — and are happy to share them — but frankly, nobody has a clue what’s going to happen. People are bad at making predictions at the best of times… right now it’s all speculation.
Nevertheless, I’ve tried to surround myself with people who i) know our industry well and ii) know how to manage a business. It’s their advice I am leaning on the most to inform my decision making. Older mentors, who’ve lived and managed their way through prior crises, are especially good for perspective.
- Making the right cuts is challenging
Spending money is much more fun than saving it. One of the perks of raising money is that you get to make ambitious plans for how to spend it. We had built up a spending plan with a 6-figure monthly cost base.
We’ve cut that back aggressively. We’ve axed every possible cost that we can. The UK government’s furlough scheme is a blessing in this regard. We’re a relatively lean and asset-light operation; our team is one of our main cost centres, and the furlough scheme has saved us a lot of money.
You have to be ruthless and unsentimental about making cuts. We had to give notice on the new office that we’d just moved into and decorated, which was a shame, but in the grand scheme of things, it’s the practical thing to do. We’ll probably be working remote for the best part of this year until social distancing eases and the business can sustain an office again.
While travel is severely limited, we have effectively flicked the switch on our marketing spend. For other businesses, this could be a bigger challenge. You have to spend money to make money. The challenge lies in getting the right mix.
- Prioritisation is hard — especially in this crisis
One of my favourite things about being a founder is that you get to manage your own time and set your own agenda. Sometimes, that’s challenging. Normally, it’s because there are too many things you’d like to work on and you don’t know where best to prioritise your efforts.
Now is a weird time… I sometimes feel overwhelmed with things that I could be doing — and then I re-evaluate, question which of them is really impactful, and realise there are only so many genuinely useful things to prioritise right now.
I figure it’s worth quickly diving into the last point. For me, the main priorities I have right now are:
- Manage cashflow. Cut all costs — and then, once I’ve cut them, re-evaluate and see if I can cut even more. The only goal I have for this year is that Stasher survives way into 2022, even if we make no revenues. Thanks to the sacrifices we have all made and the support of our investors, we will definitely survive. I am very grateful to have such an understanding team and such supportive backers.
- Improve our product! It’s rare to have this time where we don’t have customers (or colleagues) distracting the product team… now is a unique opportunity to focus. I’m proud of what our product team have already accomplished in April. At the end of this, the apps will be of a much higher quality than they were before.
- Business development — a lot of people in our industry suddenly have a lot of time on their hands. It’s been a good chance to touch base with existing and potential partners, and with competitors, and build relationships.
- Keep in close contact with team/investors — I’ve been providing regular updates to our investors, at twice the normal frequency. The team still working has a video call every morning. The team on furlough we chat to once a week, socially, to let them know what’s going on, play games and see how everyone’s holding up during lockdown.
- New revenue streams — now is quite a good opportunity to be creative. We’re going back to the drawing board in a way that we haven’t done for a long time to re-imagine the problems we can solve. There will be a lot of new problems in the post-coronavirus world.
- Upskill — I’ve put more time into skills I wanted to develop, particularly around coding and spreadsheet automation.
As a closing thought, people talk about how in every crisis there is an opportunity. In another article, I’ve covered the possible social change this crisis could catalyse. This crisis offers a rare opportunity for reflection.
As a founder and an entrepreneur, you become very focused on the company you run. I’ve lived my life for the last 4 and a half years with Stasher on my mind and always with an eye on how best to grow it.
Now is a rare chance to step back from it all, rest and re-evaluate. These are tough times we are living in, but there will be opportunities for sure. As a founder, every setback is in itself a valuable experience and I can only imagine that my future career will be enhanced from having gone through a crisis like this at a young stage.
Jacob Wedderburn-Day is the founder of Stasher — a travel tech startup that connects travelers looking to store luggage with shops and hotels providing storage space. Jacob and Anthony, friends from their time studying economics at Oxford together, co-founded the business in 2015. They have grown it from the initial idea back when they were students to being a venture-backed company, valued at over $12m, present in 250 cities worldwide. They were both recognised this year on Europe’s Forbes 30 under 30 list.