Current Moment In Road To Recovery: VC Firm Sequoia Tells Founders And CEOs

US-based venture capital firm Sequoia Capital has advised company leader to prepare for economic growth in the second half of 2021, publishing a post a year after its Black Swan memo about the Covid-19 crisis.

“While the pandemic is far from over, we see an important window of opportunity opening right now,” said Sequoia, an early investor in Apple, Google, Oracle and WhatsApp.

In India, Sequoia counts Byju's, Zomato and Freshworks among its top portfolio companies. The company said last July that Sequoia’s Limited Partners has collectively committed $1.35 billion to two new India funds. This includes a $525 million venture fund and $825 million growth fund.

“The current moment in our road to recovery represents an opportunity. If you feel confident about your business post-vaccine, now is the time to start carefully stepping on the gas (or accelerator pedal, if you’re driving electric),” said its post for founders and CEOs.

Enduring companies are built around long-term trends and behaviour. “So take advantage of this window while keeping your sights trained on what you could accomplish over the next decade,” said Sequoia, which is based in the Silicon Valley.

No one can say for certain what the future holds. Sequoia’s advice for founders and CEOs in this uncertain environment is to remain deliberate and measured. "But don’t be afraid to dream and be optimistic about where the world is going.” This will enable them to focus on long-term aspirations while navigating the next few quarters, no matter what they bring.

While Sequoia couldn’t foresee the scale of suffering or the extent to which the pandemic would expose societal inequities, it was able to see early on how it was impacting global business. It suggested the company founders and CEO’s use the brief calm before the storm to pause, challenge assumptions, and reassess priorities.

The firms made really hard decisions during the pandemic. But they also realized how nimble and efficient the companies became by zero-based budgeting and disciplined recruiting. They found more cost-effective ways to reach customers when they reset marketing spend and started from scratch. “Don’t lose your hard-earned operating rhythm, even if you believe the future is bright.”

As the storm of the pandemic begins to clear, uncertainty will continue to linger. The companies have been advised to continue the best practice of scenario planning that helped them navigate the pandemic. Knowing when to upshift and downshift in changing conditions will be important moving forward.

No one really knows what the post-vaccine world will look like. There will be just as many surprises coming out of the pandemic as there were going in. Sequoia told the founders and CEO’s to remember how diligent they were at the beginning of the pandemic to listen to customers, study their behaviour, and find solutions for their pain. “Continue to innovate on behalf of your customers,” said Sequoia. “Don’t get distracted by vanity metrics.”

Technology is flattening the world and bringing people together in new ways. Remote work has already begun expanding geographic hiring opportunities, combating bias and broadening entrepreneurship. “We see many green shoots as we enter a post-vaccine world.”

It asked companies to keep an open dialogue about challenges that employees face. “Strong leadership that puts people first will continue to be critical.”

The US is poised for stronger economic growth in the second half of 2021 than Sequoia has seen in decades. As vaccines bring an end to lockdowns closer, consumer debt has dropped, savings have risen and more stimulus is on the way.

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