By Lilly Drumeva-O’Reilly
Living in times of a pandemic puts a lot of stress on our personal lives and business. This time I decided to interview a leading American IT/technology entrepreneur and investor on the subject.
Michael Marvin is known as one of the key figures in the development of “Tech Valley” – the alternative of Silicon Valley on the East Coast. He has been actively involved in starting and growing more than 100 technology companies and investing in many of them over the last 30+ years. He was a founder and first CEO of a startup that went public 7 years later and was ultimately sold to a Fortune 500 company. Also, he was an adviser to a $1.4 Billion Equity Fund, where he served on the board. He founded and helped manage a seed capital fund that invested $10,000 – $100,000 in startup companies, concentrated within a 60-mile radius of great universities (Rensselaer Polytechnical Institute).Throughout his career, Mike has been a CEO, Chairman of the Board, Board Member, Advisor, and an investor with numerous technology companies located in New York, Florida, Virginia, Connecticut and Canada.
Michael Marvin is one of the key mentors of the Bulgarian Entrepreneurship Center foundation. He visited Bulgaria several times and gave lectures at several universities, participated in IT and Innovation conferences and seminars. His focus is on developing successful start-ups and creating breakthrough ventures.
How is your life now during COVID-19? How do you cope with the isolation? How do you protect yourself? What is your survival strategy?
I am very fortunate to have been working out of my home office for the last 13 years. I already had all the supplies, communication technology, equipment and space that I needed for these difficult times. The big difference is that I am unable to travel to all the companies and organizations that I work with. For example, I was planning to spend two weeks in Bulgaria in May. One gets tired of all the video conferences and they are at best 70% as effective as in-person meetings. Nevertheless, I am far better off than those that need to be in shops, on factory floors, classrooms, and laboratories. I have great empathy for the vast majority of the population of the world.I also have the advantage of being allowed to go outside. I have many colleagues, family, and friends that are restricted to their apartments, condos, or homes. I am able to take a walk early every morning, which is invaluable to me for being able to continue to work productively for the rest of the day. In the last month I have only been in my car 3 times. When I do go out, I do wear a mask and I shower and clean all potentially contaminated surfaces when I return. At this moment we are in an almost fact free environment relative to this pandemic. I am assuming that at some point we will all be exposed to the virus. My goal is to be the last one to contract the virus, in the hope that by then we will know enough to be able to treat everyone with the best practices.
Given your experience advising over 100 startups since you helped establish Tech Valley (the Silicon Valley of New York), what advice would you offer startup founders as they face the unplanned challenge of starting their businesses during this coronavirus pandemic?
This is a very difficult question in a very difficult time. Each startups is unique with its own set of issues. In general, the earliest stage startups are in the best situation. They are still developing their product or service. They have very low cash flow and are used to living in a subsistence mode. Startups that are ready to launch are the most vulnerable. They have made all the investment of time and resources and now, before they crater, need to start selling. In a COVID-19 world this might not be possible. Having to retool at this point with so many resources already spent, and payroll ramped up for launch, they are very exposed and are likely to need more capital at a time when it is less available. The later stage startups that have already revenue producing can be in as grave difficulty as the ones I just described, or they could be fortunate to have products that can be sold in this new world. I am working with one company that had just begun to sell drone exterior cleaning for hotels and office buildings. The market disappeared in a minute when the COVID-19 virus hit. They are now repositioning to sell contamination cleaning services for large interior and exterior spaces with specialty cleaning fluids. This is the kind of creative pivoting that startups must do to survive.
Given that capitalism differentiates itself as being “market driven”, rather than “product driven”, what metrics would you recommend for new companies to focus their attention on when we eventually emerge from this pandemic to a “new normal”?
I believe the same set of values and metrics apply. The only thing that has changed is what the environment is. There will be a multitude of new opportunities that will be created by a changing environment. This has been true over all eternity. And there will be a number of what looked like good opportunities at the time that are now invalidated.
How have “shelter-in-place” directives increased the importance for new startups to develop e-commerce capabilities to reach their customers?
Shelter-in-place was not required for startups to know the importance of e-commerce. Every brick and mortar survivor has an e-commerce component to their business plan. Even startups that don’t use e-commerce thought long and hard about why it was not an important component. The companies that had their e-commerce extend to include pick-up and delivery services seem to be faring better than those that do not.
Which industries, do you feel, will be most affected by this pandemic experience, in both a bad way and a good way?
There are many people that are far more qualified to answer this question. But, it is also important to put a timeline on the answer. What is the best answer during the pandemic may not be the answer once we have made our way through the pandemic. As an example, grocery stores have seen a tremendous increase in business over the last 2 months. But I have spoken to some people who say, “When this is over, they will never eat at home again.” This was somewhat of a joke, but you must craft your offering to not only solve an immediate problem, but enduring ones. The drone company I mentioned earlier will probably not get the majority of its revenue from sanitation once the crisis is over. Exteriors of commercial buildings will be a market again.
Do you think that being restricted to staying at home for so long, perhaps being laid off and one’s employers having to close their businesses, will motivate more people to become entrepreneurs and start their own businesses and/or work for themselves?
Stressful situations impact people in different ways. I think some people will never want to be reliant on anyone else again, but others will look for the most stable, secure place they can find in a large organization, as soon as they can, and hope they never have to face this situation again. My real hope is that everyone will learn the importance of creating rainy day funds and not feel obligated to spend all that they earn. In the US, 70 percent of GDP is consumer spending. I think that is too high. We need to save a lot more so that we have more flexibility on the big choices that we make throughout our life.
How is life going to be after COVID-19? Will people be afraid to socialize? Will most of the activities happen online?
I am sure some industries and some people will be forever changed by the pandemic, but I expect people will revert back to pre-pandemic behavior, though it may take a long time. Humans are social animals. They will want to have physical contact with other humans. It is hard to see a pupil dilation online. It is hard to press the flesh and read body language, if all you are doing is looking at a screen or a hologram. Humans are capable of doing all day meetings in person. Humans are capable of doing week-long conferences. I will be shocked if we become proficient at doing the same online.