How the Pandemic is Affecting the Ecosystem
This article is written by Jeremiah Uke, a Contributor Author at Startup Istanbul.
Startup Istanbul’s Live Interview hosted Christopher Rogers, who is a Partner at Lumia Capital where he is responsible for leading Lumia’s investment and value-add activities for companies with significant exposure to mobile platforms. Prior to Lumia, Chris was the co-founder of Nextel Communications which he grew to $13B in sales and 19k employees before being acquired by Sprint for $35 billion. Chris brings 30 years of mobile industry experience as a founder, advisor, and operator. Most recently, Chris served as a Senior Vice President at Sprint (Fortune 100, 36K employees), where he oversaw mergers, acquisitions, divestitures, equity investments and joint ventures. He also was responsible for management and oversight of wireless spectrum licenses and Sprint’s portfolio of emerging technology investments. Christopher was interviewed by Ozan Sonmez.
After what has happened in the past months, it’s important for startups to be able to look out for the welfare of their teammates. Many startups have been forced to cut down the paychecks of their employees and in many cases, also lay off a number of them. Citing Uber-like startup Careem as an example, Ozan mentioned that Mudassir Sheika, the founder of Careem put out an open call to stakeholders as regards the current situation.
A really big issue currently is with the large companies having to cut costs directly from their employees, as regards the recovery process when the pandemic is over. Christopher mentions that some startups need to do a critical self-assessment and consider shutting down at this point, with plans to come back to resume operations after some time.
Christopher also said that founders need to cut any sentimental ventures that were not yielding profits before now. A good example is a startup wanting to grow in Africa and therefore having a location in Nigeria. Whereas, the Nigerian location may not be successful.
Various companies are now also scrambling to find appropriate online tools to facilitate their team working from home. Zoom for example has experienced a huge surge in users during this time. He advised businesses to be proactive in keeping their customers engaged.
Expectations had it that 2020 will be a good year for IPOs. But currently it looks like it will be a drought for IPOs. About exits on the other hand, Christopher believes that there will be a number of opportunistic exits this year. He mentioned that some companies are traditionally conditioned to work from home, and as such won’t experience the problems other companies are facing as much. These companies can explore the option of taking their current revenue stream and find liquidity on the public markets. At this point, Christopher acknowledges that the times are too early to say things for sure, bad or good news can potentially come from any front.