On March 16th, 2020 the Canadian government announced that they were closing their borders to non-citizens.
Eventmobi sells a SaaS-based product that caters to the live-events space market. They count Visa, Facebook, and Delta among some of their blue-chip clients, and considering the world was now in shut-down mode, the demand for a software solution that helps you coordinate an in-person, large, live event tradeshow was the last thing people needed.
Bob had faced adversity before, especially considering he started his business in 2008 during the depths of the last recession, but this time was different as Bob watched his business’s revenues go from a $10 million annual run-rate, to literally almost zero, almost overnight.
By the end of March, Eventmobi’s revenue had pretty much completely dried up.
Bob had three months of cash flow to sustain his business, and without some sort of major pivot strategy, the very survival of his business was now in question. COVID-19 was an existential threat that he wasn’t sure how to weather.
The clock was ticking, and Bob knew that he and his team had to think fast. He knew how bad it was when in late March, his sales team was celebrating a $5,000 sale. And this from a $10 million company.
Not only was Bob dealing with the stress of moving his entire office from its physical space in three offices—including Toronto, Manilla, and Berlin—to everyone working remotely, but he was also dealing with two rounds of layoffs that saw his company go from 80 employees down to 60, and if he didn’t come up with some sort of new product or revenue model, and quick, he would be out of business.
He knew it, and so did his staff, and so, collectively, they put their thinking caps on. They got to brainstorming and discussed various product and revenue models that could make sense for the new Eventmobi.
It was somewhat serendipitous that at the end of March, in and around the same time the team was celebrating the $5,000 sale, that calls started coming in from clients and prospects looking for solutions to how they could move their events online and to a virtual conference environment.
At the same time, Bob kept in touch with his clients looking for feedback on how their businesses would be impacted, and how a potentially redefined Eventmobi software solution could help them with their businesses.
Bob realized that his clients wanted to move their conference online, but at this time, Eventmobi didn’t even have an online virtual event platform. With the threat of going out of business, the engineering team got to work.
Bob knew he was on to something when he sold his first deal in early April for a product that didn’t even exist.
The entire company pulled together, knowing that both their jobs and the future of the business were on the line.
Inside of a few weeks, and by mid-to-late April, the team had the semblance of a new product they could take to market.
Fast forward to the present, only two months after most of the world closed its borders to travel with all in-person conferences canceled, and Eventmobi’s revenues are back to 50% of where they were at their peak, and the pivot strategy is starting to take hold.
Bob is estimating that his new business model’s revenues will likely surpass the old Eventmobi inside of the next year, and once the world does open up, not only is Eventmobi well positioned to take advantage of the online event space, but revenues from the old product line should also bounce back.
At the end of our conversation, I asked Bob, “If you could, today, have a conversation with yourself from a few years ago, what words of wisdom would you offer yourself?”
Bob suggested that he would tell himself to save more of his business’s profits much earlier on, and not wait for some time in the future to start creating wealth outside of his business. He came to realize how precarious his wealth was with too many eggs in one basket. Lose the basket, which almost happened, and you lose the eggs.
Pivot Strategy, and Pivot to Growth
I’m sure we’re going to hear many success stories like Bob’s over the next couple of years. Most stories will probably not be quite as dramatic as $10 million to zero and back again. Still, this pandemic has forced many business owners into realizing they need to act quickly, pivot their business, and claw their way back to survival.
Here’s what I wrote in a late March blog post:
“You’re going to need to innovate and stop hoping that things will go back to how they were. They won’t. The world is and will be a different place as a result of this pandemic. You can either become a victim or an empowered entrepreneur in search of new and exciting opportunities. It’s all a matter of perspective. You can’t control the fact that the world is changing, but your attitude is something you absolutely do have control over.”
Despite all the negativity surrounding Bob in late March, with his business’s very survival on the line, he seemed surprisingly unfazed. He took it all in stride, remained calm, worked hard and smart, communicated with his staff, was upfront with his messaging—both to his employees and equally as important, with his customers—and maintained an air of optimism in the face of complete uncertainty. It seemed like he almost knew that he would prevail.
Bob admitted that he can’t completely breathe easy yet, although the steps he’s taken in regard to his pivot strategy are working and things are definitely looking better than they were 60 days ago.
Our conversation reminded me of just how difficult it is to be a business owner. You literally put everything on the line and work like crazy at the chance of making it. Eighty percent of new businesses go out of business within five years of opening their doors, and despite the uncertainty, if you asked most business owners if they would do it all over again if they had the chance, most would probably say yes.
For me, entrepreneurship was a path to freedom. Freedom to choose my destiny and reap the rewards of my hard work.
And therein lies what is probably the biggest paradox of entrepreneurship.
Many people become an entrepreneur thinking it will lead to a life of riches. And it certainly can, but what I learned from my conversation with Bob is how important it is to prioritize profitability. You can’t wait for the eventual sale of your business for your payday, because that payday might never happen, and the worst thing for a business owner would be to find themselves, after many years in business, with nothing at the end of some recession.
Bob admitted as much. He’s decided that when things get better with his business once again, he’s going to pay more attention to the wealth side of the entrepreneurial equation, and therein lies part of the problem, not with respect to Bob’s business specifically, but, with most small businesses. There’s such a focus on building the top line that profitability is often an afterthought. Along those lines, I created a course of building profits into your business. The title is: How to turn your small business into a profit machine in 60-days.