Jesse Levin is CEO of Brightfield, a New York-based workforce analytics company, and his biggest fear is the rise of a "herd mentality" where startup leaders try to navigate the crisis based on a singe playbook.
He's particularly critical of the so-called "Black Swan" letter that Sequoia Capital published about a month ago as the coronavirus crisis was unfolding.
In the letter, Sequoia warned that "in downturns, revenue and cash levels always fall faster than expenses" and that, in terms of headcount, "this might be a time to evaluate critically whether you can do more with less and raise productivity.
Levin lamented that the Sequoia letter "became gospel immediately and resulted in deep cuts across the same companies that they had encouraged to over-raise and overspend."
For startup founders and CEOs, now is the time to "reset your ambition to target a great return with more reasonable risk," Levin said.Â
In a downturn that is in many ways more severe and unpredictable than past crises, Levin said startup CEOs should encourage their team leaders to be comfortable with uncertainty instead of intimidated by the blurry path ahead of them
"Ensure your leaders are comfortable with imposter syndrome," he said, referring to the psychological pattern of doubting one's ideas and abilities. "The pandemic recession has some attributes that are similar to past cycles, and many that are not. Thus, your leaders must exhibit confidence and clarity even when they don't know what's next."
Another tip: focus on customers, accommodate their needs, even if doesn't boost your bottom line in the short-term.
"Customers and prospects do remember who invested in them at the bottom of a cycle and, in my experience, do find ways to balance the karma scales when the market comes back, Levin said.