To help our startups understand how Covid is impacting their business, and to help them quickly get a grasp on how they can mitigate the risks of Covid (and put in place a plan to counter its effects), we created this BluPrint for Covid Risk Mitigation (represented as a 2×2 matrix below).

We would like to share this with the wider startup ecosystem to help every founder develop a gameplan for the post-Covid world.

Represented above is a simple 2×2 matrix that will help you (the startup founder) focus all efforts and energies on what you can control.

On the X-axis — is the runway. This is basically money in the bank (divided by) the next month’s burn. The money expected to hit the bank in the near foreseeable future has been discounted in this computation.

On the Y-axis — is the Covid Coefficient. The Covid Coefficient gives an overall view of the company’s position, and helps you revisit and recalibrate your strategy at regular intervals.

The Covid Coefficient is computed as a weighted average of the following three parameters (w/ each company scored on 3 grades of low, medium and high.) 

1/ Business Impact: What is the intensity of the tailwind or headwind faced by the company? e.g. EdTech (positively affected) vs Travel (negatively affected)

2/ Relevance: How critical is the product for consumers even in a non-Covid scenario? Is there a proxy for product-market fit in a non-Covid scenario?

3/ Adaptability: What is the ability to utilize the current downtime on the demand side? What is the ratio of resources being used to generate new revenue vs resources being used to retain old revenue?

Distance from the green quadrant & way forward

At the end of this ‘BluPrint for Covid Risk Mitigation’ exercise, companies are encouraged to share their views on where they lie in the 2×2 matrix, and what it would take for them to move upwards – rightwards towards the green quadrant.

While we are living through a period of business, economic, and personal uncertainty (at a scale that is monumental), startups should use this time to focus on building a better product, improving internal processes, and keeping existing customers well served. Because the way forward (in a post-Covid world) lies in being able to adapt, basing your actions on a clear set of assumptions, and adopting the right wartime mindset.

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