523: Creating Opportunities in a Time of Crisis

In today’s episode of The Startup Chat, Steli and Hiten talk about creating opportunities in a time of crisis.

During these difficult times, a lot of business are going to struggling to stay alive, and even more, are going to fail. It’s tempting for some founders to give in to the challenging times which ultimately results in the collapse of their businesses. However, it doesn’t necessarily have to be so, with a little creativity and some innovation, founders can adapt and still keep their businesses afloat in these times.

In this week’s episode, Steli and Hiten talk about reinvention versus destruction, how this pandemic is negatively affecting some businesses, examples of example of entrepreneurs taking advantage of the current situation and examples of business that are innovating in this crisis much more.

Time Stamped Show Notes:

00:00 About today’s topic.

00:37 Why this topic was chosen.

02:17 An example of an entrepreneur taking advantage of the current situation.

06:19 How some restaurants are really innovating right now.

07:53 Another way some restaurants are innovating.

09:19 One other way some restaurants are innovating in this crisis.

12:02 How a startup in the fitness industry is innovating.

06:01 How being successful in a time of crisis is all about getting creative.

3 Key Points:

• Tailors are very risk-averse.
• Don’t let things that get in the way of others get in your way.
• I’ve been most impressed by the number of restaurants that are really iterating right now

[0:00:01]

Steli Efti: Hey everybody, this is Steli Efti.

[0:00:03]

Hiten Shah: And this is Hiten Shah. And I think in true Steli and, I guess, Hiten form, Steli and me form, we’re going to talk about something positive today and something that Steli came up with. I don’t know when he came up with it, but I heard about it right now. And what it is is, I think, something much needed right now, which is a discussion about what we’re seeing that’s actually working in business right now, considering shelter in place, COVID out of control, I think somebody called this Armageddon or something like that to me five minutes ago, before I got on this.

[0:00:40]

Steli Efti: Oh, really?

[0:00:41]

Hiten Shah: Yeah. They called it Armageddon. They’re like, “Yeah, how are you doing with the current Armageddon, blah, blah, blah?” I’m like, “I’m doing as fine as I can. And definitely better than a lot of people.” So I can’t can’t really complain about anything. And so, yeah, let’s talk about it. I think the big thing was, what approaches are working right now for people that we can kind of talk about, right?

[0:01:03]

Steli Efti: Yeah. I felt that it would be a good idea to just share some examples in our network, or within our friends, or anywhere that we’ve observed, that we’ve seen, over the last couple of months that we thought, “Wow, this is inspiring,” or, “This is cool,” that somebody is creating, or innovating, or adapting and changing, and succeeding in some way, finding opportunity, even in these difficult times, just to give people inspiration, to simulate them, and just because we have enough of the critical things that we read and hear about every single day. So how do we want to do this? You can go first, I can go first, with examples, and we’ll go back and forth, and I’m sure we’ll come up with and be able to share a bunch of good stuff with people.

[0:01:47]

Hiten Shah: Yeah, that’s fine. Yeah. Yeah, go ahead. Yeah.

[0:01:48]

Steli Efti: So the first thing that I’ll bring up is… Actually I want to go outside of tech, alright? So, at the very beginning of COVID being a bigger thing in Europe, I remember that, in the first few weeks, there was this shortage of masks. It’s not a problem anymore. This is a past problem. But while it was a big surging demand and problem, I remember that people were trying to research and figure out where locally can I buy some masks, because nobody could order anything online and get it. And I remember that I heard from a friend about a little store that was… I don’t even know the English word for that, you know those stores that do leather work, they fix your shoes, or if your-

[0:02:37]

Hiten Shah: Tailor. A tailor. Equivalent to that. Something like that.

[0:02:39]

Steli Efti: Yeah. There’s a small tailor in this town that’s 20 minutes from where I live that has and does masks, just go to him. But you have to have time because there’s a huge line outside of his little store. And so, I go there and the whole shop window is full of all kinds of designed masks, all kinds of flavors for kids for this, for that, and there’s a huge line outside the… It’s a tiny store, really. So I wait in line, eventually I get inside, and I wanted to buy some masks for my family, for kids, for relatives. And I start chatting up the guy that was running that tailor store, and the first thing that I noticed that, as I entered, there were all these, thank you letters that he had hung up from local hospitals and doctor’s offices. And I was like, “Oh, that’s cool. Did you just supply all these people?” And he’s like, “Yeah, all these hospitals and medical professionals in the area had a difficult time obtaining masks. Now, some of the masks that I do hit the medical grade, but I am not sure getting certification for it. That would be too difficult. But they still wanted them, so I’ve been just donating them.” And he’s like, “And the other reason I have this, to be honest, is it’s just good marketing. People just feel good when they see this. And so, I thought it’d be a good idea.” I’m like, “Oh, cool.” And then I asked them, I’m like, “How many other tailors are doing this?” And he started laughing, and he was like, “Nobody does this except me.” And I was like, “Why is that?” He’s like, “Well, the thing is, tailors are not very entrepreneurial. They’re very risk averse. And honestly, what I’m doing, sort of may be questionably legal.” So he’s like, there was twice that police had shown up to talk to him, to see if he’s allowed to turn this into a mask shop or whatever. And once they saw all the thank you letters from the medical community, and they talked to him, they just left again. They’re like, “This is fine. He’s just providing a service. He’s helping the community. It’s cool.” And he had, basically, a bunch of women that would build these masks in his tailor store, and he’s like, “I’ve never been busier in my life. I’m making a ton of money right now, and I don’t feel like I’m taking advantage of people. I’m providing a service, giving people something. I’ve priced my mask. I could price them three times the amount, and people would still buy them, but I priced them at a margin where I feel like I’m making good money, but I’m also fair, they’re still affordable to people, and I’m just raking in it.” But the reason why other tailors wouldn’t be doing this is because they’d be too afraid if they allowed or not, if they’d get in trouble, and they’re just not flexible enough to be like, “You know what? Nobody’s going to come into the store to fix their leather shoes right now, but there is a huge demand for an item that nobody has and we could easily provide.” And that was one of my favorite examples of just somebody being creative, being positive, adapting, changing what he’s doing, and crushing it. For weeks, there were lines out of that person’s shop. And the other benefit of that is I’m never going to forget that guy. And I don’t go to the tailor that often, but if I need to, I’m going to him. I’m just going to that store. So that’s one of my small local stories that I really loved and that was inspiring for me to see.

[0:06:20]

Hiten Shah: Yeah, I’m going to continue the trend. And that’s amazing. I mean, there’s so many levels of that that are amazing. Part of it is he just didn’t let things that he knew would get in the way of other people get in the way of him from doing it. And I think that’s super powerful. I mean, legal or not, he was providing a service and people needed it, or a product and people needed it. And it was their choice whether they took it from him or not. And by donating it, I think he’s definitely skirting a lot of things in a good enough way. And at a time like this, I think it’s difficult for people to get in trouble on some small things like that, and what matters more is that people are taken care of. So on that note, I’ve been most impressed by the amount of restaurants that I’m seeing really iterate, and ones that I was most impressed by are the ones that iterated super early, their whole model, and they started doing take-home meal kits, where you could make that spaghetti that you love from that Italian place at home, and they gave you all the ingredients to do it. So that was what happened really early on, when even food pickup was not acceptable. And that was really crazy to see, even watching them iterate through a few different platforms to help them sell. It was kind of fun to see, just being in tech and all that. And then lately, just the amount of creativity to be able to provide people with food that’s of restaurant quality that you can pick up from restaurants that didn