Now is the time for entrepreneurs to play offense

Here’s the six-part playbook I’m hearing:

1. Acquire talent

A few years ago, it was impossible to acquire talent. The best engineers, sales reps, and growth managers could name their price and had a dozen offers in front of them. Today, layoffs—particularly at growth stage companies—have led to a massive pullback in startup hiring. Thus, some of the most talented people in our ecosystem are suddenly up for grabs again. My best portfolio companies are judiciously adding remarkably talented people on the front lines, taking advantage of arguably the best talent market in a decade. I'm amazed at the quality of the hires that are happening for those who are seizing this moment to pursue outstanding talent.

Also read: 8 recommendations to help firms win the war for talent

2. Uplevel executive teams

It’s difficult to admit, but the executive team you were able to attract a year ago may be very different from the executive team you can attract today, particularly if you’ve grown in the last year and have a demonstrably bright future ahead. Like the talent point above, C-level executives at companies that were rocket ships at one point find themselves either laid off or disillusioned by their future prospects. That stretch VP of sales? Go get them. The COO who wouldn’t look twice at you a year ago, they’re begging to have the opportunity to re-engage. Rigorously evaluate the quality and capacity of your senior team and take advantage of the extraordinary executive talent looking for new homes and more promising pastures.

Also read: Leading is tough right now. But you've got this.

3. Make process improvements

Let’s face it, the last few years have been frenetic. Velocity was at 11 for everyone. When you’re moving that quickly, inevitably there will be sloppiness in your execution. Sometimes it’s a gift to have the opportunity to slow down and fix your processes and make sure you’re doing things in a scalable, repeatable fashion. The Navy Seals have a saying: “Slow is smooth. Smooth is fast.”

The best entrepreneurs are taking this slower moment to re-examine their key business processes and make sure that they’re running them more effectively and efficiently. Train your interviewers (Who has time for that? Now you do!) and develop a more careful rubric for developing job descriptions and scoring candidates. Rethink your product development prioritization process. Make sure sales best practices are being disseminated systematically within the go-to-market organization. Fire unprofitable customers—unsustainable, unprofitable growth is no longer valued. Executing well on this component of the playbook can provide significant leverage in a few short years.

Also read: Why some employees improve their creativity and others don't

4. Invest in your product

Speaking of the product development process, if sales are less frenetic and customer requirements (and complaints) less noisy, take the time to invest in your product roadmap. Engineers and product managers love it when they’re “left alone.” Take the time to do deeper customer discovery and requirements gathering. Customers might be more open to participating in beta tests, new feature rollouts, focus groups, and customer advisory councils. This moment in time, where there are fewer distractions, is one where product teams can really make headway on their ambitious roadmaps and take the time to articulate – and take steps towards realizing—their long-term product vision.

Also read: Consumer streaks are motivating, the key is keeping them alive

5. Execute small, targeted M&A

Every asset was overpriced a year ago—houses, public stocks, startups. With the market correction, suddenly assets are more interesting to acquire. Many, many startups are flailing. Cash reserves are dwindling and they are desperate to find a safe landing. Thus, the companies that can afford to play offense have the opportunity to scoop up amazing teams, customer bases, and platforms.

One of my portfolio companies has executed three acquisitions in the last six months at prices that are 2-3 times lower than what the selling entrepreneurs were asking for a year ago. Developing skill as an effective acquirer is an important muscle for scaling companies and now is a great time to test out that skill.

Also read: Bain & Co: Indian M&A near an all-time high, with first-time buyers driving deal volumes

6. Consider financing

There is a ton of money out there looking for great companies to invest in. Funds have raised an enormous amount of capital in the last two years. Never before in the history of entrepreneurship has there been this extraordinary amount of committed capital designated to invest in startups. If you have built a good business with promising prospects, you can stand out from the crowd far more easily today than ever before. Yes, your valuation may be 20-40 percent lower than you had hoped, but you can still raise plenty of money to buttress your balance sheet and execute more vigorously on steps 1-5 of the “play offense” playbook outlined above.

Also read: A peek inside the hidden, messy world of corporate venture capital

In talking to my best founders over the last few weeks, each of these elements of the “play offense” playbook is now well underway. The companies that can afford to execute on them, and do it well, will be light years ahead of their competitors in the next few years.

About the Author

Jeffrey J. Bussgang is a senior lecturer in the Entrepreneurial Management Unit at the Harvard Business School as well as co-founder and general partner at Flybridge Capital Partners, an early-stage venture capital firm.