The coronavirus pandemic has been tough for every company. But as in every crisis, the smaller players have suffered more than the big players.

Tech startups have faced particular difficulties. Fitness membership startup ClassPass dried up more than 95 percent of its revenue in less than two weeks. Hiring platform ZipRecruiter has laid off nearly half of its workforce.

There is no one-size-fits-all solution to startups’ financial struggles. What they can do, however, is to see how agencies designed to help tech startups grow are handling the situation.

For that, I met with Eric Huberman, founder of Hawk Media. Hawk Media is the fastest growing agency in the United States and serves as the outsourced CMO for several tech startups.

Eric take? Every startup is going to struggle, at least in the short term – but the biggest opportunities lie in adversity.

Talking Shop for Tech Startups
Eric and I covered a lot of ground. Here is a lightly edited transcript of our conversation:

Brad Anderson: How has Hawk Media been affected by the COVID crisis? Has it seen any silver lining?

Eric Huberman: For the first time in six and a half years, we’ve completely gone away. It’s tough at the best of times; Trying to do it all night.

We also have client challenges. Though we are fortunate to have a huge customer base, some of their struggles have affected us. We’ve found some lack in marketing, while others have stopped entirely. A lot of triage work has been done.

The silver lining we’ve seen is that, as we continue to focus on the Internet business and drive digital commerce, our work has become increasingly important to our customers. In the past six weeks, e-commerce has grown from 18 percent to 30 percent of consumer spending. As a result, we have been able to almost double the average online company we work with.

Many of our customers are thriving in this crisis. Among them come challenges from minorities that have not developed – and in some cases, simply cannot grow – in the meantime.

BA: Hawk Media seems to have handled the crisis well so far. What are the major risks other startups face?

EH: It’s important to understand that every startup is going to lose some customers because of the pandemic. This is just a fact. If you have a diverse customer business, there is a very strong chance that some of your customers will take back what they are spending with you.

There are two ways to resist cutting back on your customers: You will either need to develop your existing customer relationships, or you will need to develop new ones.

Like us – and many of your own clients – you are also learning to work remotely. It’s going to look a little different for every company. How you meet, operate or manufacture may need to change. This crisis may last for some time, so focus on creating new processes and procedures.

Similarly, let’s say the fundraiser is going to be victorious for a while. Some firms, like Zoom, are going to turn down very high rates because they are built for this sort of thing. At the same time, investors are uncertain about what the future will look like, so it will be difficult for most companies to raise funds.

BA: Those are big challenges for small companies. How should startup leaders handle them?

EH: The good news is that the cost of marketing has come down as many companies have pulled out. In that sense, replacing a lost business is actually easier and less expensive than you might think.

This is why we at Hawk Media are taking offense. Double down on marketing and sales now, and you should see a jump in retention and acquisitions as the situation improves.

However, remember that sales and marketing right now may not be a contact sport. You have to work with the least amount of human contact possible. Use digital tools, but make sure you don’t lose the humanity of the workplace.

Throw happy hour. Have a zoom party. Involve your team in addition to just slacking off and working from home. People are going to be lonely, so it’s up to your company to keep the culture strong.

Focus on building to the last. You don’t know what’s coming. If you’re burning cash, slow the burn; If you’re having a mid-conversation with an investor, close it. Slow down a bit, and find ways to grow your business so it’s not just a startup.

Are you really ready to make money? If you can increase revenue and build a solid business instead of just fundraising, you’ll be fine. “Primetime revenue solves everything,” as the saying goes.

BA: How can tech startups move beyond just facing challenges? What opportunities do you see related to ?

EH: As I mentioned earlier, marketing is cheap right now, and the ROIs are massive. If you can market digitally and aren’t in an industry directly affected by the pandemic, you’re probably doing pretty well right now.

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