Two months into the coronavirus, Airbnb CEO Brian Chesky told 7,500 employees that a quarter of them were about to lose their jobs. With its core industry decimated by the coronavirus pandemic, the once poster child of Silicon Valley seemed on the brink of obsoletion.
What a difference four months make. With bookings up and a public offering still in the pipeline, Airbnb remains a bright spot in a sea of devastation across the global travel industry.
And why is this? That's because Chesky embraced risk of failure with vision, agility and innovation—something seen surprisingly infrequently among the technology and start-up sectors.
As the founder of a technology PR agency based in Singapore, I've been fortunate to advise and learn from some of the most dynamic start-ups and tech companies. I've also been at a vantage point to see when so many are unable to thrive despite having the odds seemingly stacked in their favour, through benevolent investors or a patient holding company.
What underpins a modern, agile workplace is an adaptive mindset: businesses that would sooner fail than become ageing, legacy shadows of their former selves. Singapore's PM Lee knows that all too well and rightly regards top technology talentto be the bedrock of this new breed of modern organisations.
The whirlwind of a year has meanwhile demonstrated that digital transformation is no longer a growth strategy—it's a survival instinct.
Three decades ago, digital was the economic Darwinism and CEOs who could not understand its significance were fast rendered obsolete. Remember Blockbuster or Toys R Us? Two household brands that struggled to pivot into a digital age, and subsequently imploded, making way for fast- moving and customer-centric tech brands like Lazada, Amazon and Alibaba. A lasting reminder that the agile bird gets the worm.
However, today Darwinism is a constant mindset of agility and innovation as well as an appetite to take risks to outpace the consumer. Brands like Gojek and Sea have successfully followed the lead set by China's Alibaba and incorporated elements such as mobile payments and ecommerce services, going well beyond their original offerings.
Leaders who understand the importance of fast-learning and transformation will be the survivors from this pandemic.
On top of adaptability, the Covid survivors of the tech industry will be those with a solid foundation rooted in culture, employee and customer-focus. I've witnessed many tech companies in Asia simply living from one capital raise to the next, whilst not paying sufficient attention to startling employee churn, client attrition and languishing growth.
However, the pandemic has shown that to be unsustainable as venture capital funding continues to shrink amid a global economic downturn. Those founders now looking for a clear getaway plan may find these plans scuppered as the current conditions force investors to be more scrutinising of start-ups' growth and value.
As a PR practitioner responsible for the reputations of numerous Asia-based technology companies, I know how to spot a business that is struggling and more importantly the levers needed to correct the course.
Key signs to look for include a sudden close-up-shop of communication and a failure to engage either internally or with the media and shareholders. While you can forgive leaders for wanting to protect their reputations—and company share price—the reality is that people are usually smart enough to see right through it.
On the reverse, Chesky's openness about Airbnb's difficulties was praised for its sincerity: both in the regret for his staff lay-offs but also the commitment to their welfare as shown through giving them 12 months paid health insurance. For me, this is representative of a leader who values reputation as more than just a sales exercise. Lay-offs are a sad reality of crises, but good, effective communication will be what is remembered and brings the best talent back in the long-term.
Although we don't know what the next generation-defining crisis will look like, having seen economic, biological, political fissures test businesses in the last 20 years alone, I do believe it's the adaptive mindset that will more likely weather the storm.
This is more than a protective measure: adaptive businesses will be better suited to recognise and embrace innovation to remain competitive. The best of these know the next opportunity even when it doesn't have a shape yet—but they're ready for it nonetheless.
Technology has proven the most resilient sector during the last 10 months and that cannot be attributed to good fortune alone, when global downturns affect everyone. Those that are focused on building brand roots, customer loyalty and employee dedication will be the ones to emerge from this the strongest. Not everyone can be Airbnb of course, but they don't have to be Blockbuster either.
The writer is Oliver Budgen, Founder and CEO of Bud Communications. This article was first published in PR Week