A panel of New Jersey university entrepreneurship leaders gave advice to startups and small businesses on how to survive the challenges brought on by the pandemic. The group was brought together earlier this year by James Barrood, former CEO and president of the New Jersey Tech Council, based in New Brunswick, and now an adviser to Tech Council Ventures, based in Summit.
But first, several of the university entrepreneurship experts reflected on where entrepreneurship stands today.
While there is a lot of hurt out there, digital businesses seem to have overcome the issues that arose during the pandemic, said Susan Scherreik, director of the Center for Entrepreneurial Studies at Seton Hall University’s Stillman School of Business.
It’s a bifurcated space.
“We know that 30% of small businesses have closed in New Jersey,” she said.
But there are some very bright spots.
“We have two young alumni, one runs a retail specialty online operation in Hoboken, and they’re the 17th-fastest-growing business in New Jersey,” she said. “Another one of our alums runs a medical digital operation, and they’re the eighth-fastest-growing business in New Jersey.”
Princeton University’s Anne-Marie Maman, executive director of the Princeton Entrepreneurship Council, who works with companies in need of venture capital, said “it’s gotten harder and harder” to get venture capital.
“By the time an entrepreneur gets to a fundable VC round, those rounds are huge,” she said.
Compared with before, a venture capital round used to be between $3 million and $5 million.
“Now we’re seeing rounds of $100 million,” she said. “And you have a lot of fundable milestones to hit before you get funding.”
Before the university entrepreneurship session ended, the experts gave their best tips to the entrepreneurs on the call.
- Princeton University’s Anne-Marie Maman: “The thing I always come back to for myself, as well as for people that I’m talking to, is ‘first things first,’ (getting back to basics). You must make sure to do the first things and do them well before you can grow to do other things.”
- Fairleigh Dickinson University’s Dale Caldwell: “Understand that you don’t know everything, no matter how long you’ve been in business. Be hungry for learning, because I will guarantee there’s something on the internet, something (on YouTube), that is going to make you $10,000 more than you would have made over the next month. I’ll guarantee that, but you’ve got to find it.”
- Seton Hall University’s Susan Scherreik: “Put your employees first. … We’re all going through this pandemic, and there’s a huge illness out there. Check in with your employees, make sure they’re OK, make sure their families are OK. … (Tell them it’s no problem) if they need more flexibility in their schedules, whatever it might be. Don’t forget that human element. They are your lifeblood, and they are people, and we all have to stick together to get through this.”
- New Jersey Institute of Technology’s Suresh Kumar: “Three out of 1,000 people are entrepreneurs. The other 997 people will determine your success. They can be customers, investors, suppliers, brand champions, partners, mentors. … Build what I call ‘high-trust relationships,’ and that would not happen only online … it’s got to be done in other ways, too. And I think you’ve got to focus on how you do that. There’s a community out there … and if you can engage them constructively, you have a much better chance of succeeding.”
Speaking about family businesses, Dale Caldwell, executive director of Fairleigh Dickenson University’s Rothman Institute of Innovation and Entrepreneurship, noted that they have been disproportionately affected by the pandemic. He urged the audience to remember that, when a family business closes, the entire family is often unemployed. By contrast, a lot of the big box stores have stayed open and are doing record business.
Caldwell would like to see a pandemic equity grant for family businesses.
“They should really grant some of that money to local family businesses, since it affects them much more than the rest,” he said.
Another idea is to create entrepreneur zones, built around the idea of an Opportunity Zone, “but the idea is to provide tax credits to people to invest in businesses in urban communities.”
How businesses survive during pandemic
Suresh Kumar, director of innovation and entrepreneurship programs at New Jersey Institute of Technology’s Ying Wu College of Computing, noted that the first thing entrepreneurs must do is reevaluate their business models and, “Get a bearing of where they are. Can they still sell what they have been selling before?”
They also must review their distribution partners and business models, and look at their office space requirements.
He added that many entrepreneurs don’t know how to use digital strategies for marketing. There are lots of layers to digital marketing, he said, and entrepreneurs must understand how to grow social media to bring in customers.
“You need a few key people in the company who really understand how to use social media,” he said.
Kumar said that, at this stage, 10 months into the pandemic, companies should concentrate on getting customers and retaining customers. They have to do “whatever it takes” to deliver value, and, “Maybe you deliver a little bit more and focus on that aspect. You might be able to deliver more service or provide a different channel of delivery.”
He said that, to get customer betas done, you may have to create new structures, perhaps giving some equity to your customer partner for assuming the risk.
Caldwell said that family businesses that have been plodding along for 100 years should probably send their executives back to school to take courses, to bring those running the business up to date.
Also, many family businesses were left behind when disaster struck in 2020 because they hadn’t cultivated relationships with their bankers and accountants.
“You really have to build these relationships,” including with your landlord, he added.
“The piece of advice that we give most often is to tap into your network,” Maman said. “Now is the time that it’s important to think about who you know that can help you, whether that’s helping you with an introduction to a customer, whether that’s helping you think through strategy; giving you advice from somebody who’s been there, done that before; whether it’s giving you an introduction to a banker or a lawyer; whether it’s connecting you to somebody else. Maybe they can’t (help you), but maybe they know somebody else that can. So, if you haven’t been doing this before, start tapping into that network as hard as you can.”
Another important piece of advice is that entrepreneurs must go back to basics, Maman said.
“I think for a while it was easier to float along without having everything buckled down,” she said.
There’s no room for not really understanding your strategy and your finances, she added: “You really must do your work on your basic foundation if you’re going to be going out and answering questions about your business.”
Scherreik agreed with the other panelists on social media. She noted that keeping a company’s name in the public eye, in a good way, will help it to recover when things begin to get back to normal. For example, one entrepreneur has been delivering pizzas to essential workers, and, while his company may be hurting, he is keeping the name top of mind for when the pandemic ends.
Now, more than ever, entrepreneurs are focused on day-to-day survival, she added, but they must take a step back and spend time on long-term planning. They need to look at their financial health and see how their income statements, balance sheets and cash flow statements look compared with a year ago.
Things are not going to be the same after 2020, she said, so, “Make sure you are in tune with your customers,” and know what they want from you going forward.