Earlier this month, Sequoia again published an open letter offering similar advice to its portfolio companies in response to another global crisis that is fast becoming even more serious than the great recession. Calling the coronavirus outbreak The Black Swan of 2020, Sequoia warned that it may be contained only after “several quarters" and it could take “even longer for the global economy to recover its footing". The fund urged its portfolio companies to “question every assumption" about their business, and consider cutting jobs and spending.
Even before Sequoia’s warning, startups in India had already started seeing the chaos unleashed by the coronavirus. Investors and entrepreneurs say this is easily the worst crisis for startups, and for the broader economy, since the Great Recession.
In every aspect of their business, from fundraising to customers to employees and suppliers, internet startups—like other companies—are struggling to cope with the impact of the virus. Some are scrambling to save their businesses from collapse.
The founder of one unicorn startup, on condition of anonymity, said that after an emergency board meeting, his firm is drawing up contingency plans that include job cuts and the suspension of operations in several cities. If the virus spreads in India, many startups will be forced to do the same, he added.