Scenario planning

Startup founders are used to thinking big and building projections of exponential growth based on highly scalable business models. Weekly, monthly, and annual projections are the typical guideposts for determining whether execution is on plan. Unfortunately, the Covid-19 pandemic has caused projections to go out the window.

Today, some much remains uncertain that it is impossible to accurately project what will happen. Startups need a new set of guideposts to determine what is happening and make crucial decisions on what need to be done.

This is where scenario planning come in to play. Scenarios are possible outcomes, not projections, based on certain external or internal events. Often they have the form of a range of outcomes from going from very good to very bad. Startup founders are not wired to build pessimistic projections, but they can look objectively at the puzzle in front of them and understand what could go right, or wrong.

Startups can think opennly and objectively about a range of potential scenarios, including scenarios of significant revenue reduction, without adding a subjective opinion of whether or not it will happen. The Sequoia Covid-19 Matrix is a very helpful tool for this excerzise.

Going forward:

  1. Build-in check points to re-evaluate metrics and progress. Make plans to take specific actions based on a multiple future outcomes.
  2. Use your advisory board to look objectively at the situation. Find people you trust to talk through downside scenarios, no matter how unlikely or undesirable.
  3. Make decisions quickly. Uncertainty does not mean in-action. Not acting, is it itself a decision. Making decisions quickly based on the information available and move forward.

Dwight Eisenhower said, “planning is everything, the plan is nothing.” This mindset allowed him to realistically think through a grueling situation, and be ready to take decisive action to lead a team to a positive outcome.

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