Advice for Software Startups During the Pandemic


You took the leap. You founded a startup. After developing a business plan and maybe even choosing a co-founder and hiring skilled resources, you embarked on fundraising. You may have even moved past seed funding to start to talk with investors and share the promising key performance indicators (KPIs) you’re tracking. You made a lot of plans and established a lot of goals, but it’s unlikely that you expected to be derailed by a global pandemic.

David Karandish, CEO of Capacity, shares his insights on some of the challenges that startups founders are facing in 2020 and what the future may look like.

What’s the investment climate like since the spread of COVID-19?

Karandish: It probably goes without saying that the current investment climate varies by industry. Investors in heavily impacted industries like hospitality and events are in cash preservation mode, whereas companies that have offerings well-positioned in our new economic reality are still seeing investment flowing. There is still a lot of cash out there looking for a home.

How should startups approach preserving or finding new sources of revenue?

Karandish: It depends on your offering. If it’s already well-positioned to succeed in our new reality, then the company should keep focusing on execution. If its offering is not well-positioned, its leaders should consider tweaking the offering to be more in line with these economic times.

How can startups address the problem of needing people to move forward but wanting to manage finances conservatively?

Karandish: There are a lot of ways to accomplish both. For example, many interns lost their summer internships this year. We were able to secure a strong work product without much financial burden through a “class project” structure by partnering with a local university. We have also been more creative in our hiring practices by bringing on highly qualified part-time or reduced-hour team members that need flexibility in their hours.

And, productivity tools with artificial intelligence (AI) and machine learning (ML) are on the rise. There’s so much time spent in simple tasks, like finding the right document or manually completing a workflow, that humans should be using smarter tools for. It’s best practice to test your preconceived notions of each team member’s KPIs and find the best way to accomplish your goals.

Can offering products on a subscription basis help?

Karandish: Yes! Subscriptions lead to recurring revenue, which is very helpful, especially to startups and during a recession.

What do you predict for startups through the remainder of 2020 and 2021?

Karandish: Through the remainder of 2020 and into 2021, startups with a product that is resilient to our new economic reality will continue to succeed. Those startups with a less resilient product, like one that is focused on an in-person experience, for example, will likely face more headwinds, thus need to be more conservative with capital. 

You Knew It Wouldn’t Be Easy

Few founders imagine the path of turning an idea into a successful business will be a smooth one. Among all of the lessons that 2020 taught us, it is to be prepared for anything. It’s an important lesson to learn, not only to help you grow your startup but also to sustain its success. Find a way to adapt to the current crisis, beat the odds, and reach your goals.



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