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Doubling Down on Core Values

A letter to our entrepreneurs

The world is going through significant chaos, and individuals, as well as organizations, are bracing themselves for a rough ride ahead. In times like these, a useful “northstar” for CEOs to make decisions is the “why” of their entrepreneurial journeys – when thinking through business health and the health of the ecosystem they operate within. Keeping this in mind, here is a simple note that we sent to the entrepreneurs that Elevar has backed. We hope this was useful for them … and for anyone else reading this.

Dear Entrepreneurs,

No doubt, each one of us is tracking, watching and internalizing developments from around the world. We thought we would share some of our first-hand learnings (over the years), keeping in mind the multiple macroeconomic shocks we have seen on low-income communities (and indeed, businesses that focus on delivering services to the underserved) over the last 15 years.  


The biggest realization has been that we tend to play ‘catch-up’ on implications that unfold in phases –  often on account of our optimism, denial or entrenchment in urgent execution matters that emerge. And so, we hope some of these pointers help evolve a more anticipatory approach to the months and quarters that follow. In some ways, we avoided sending an email earlier, as it was important to synthesize learnings without over-simplification or articulating generalizations. It is also important to clarify that we are not commenting on the medical issues associated with Covid-19 (that is best left to experts) – but we are drawing attention to a framework of thinking and some economic, business and practical implications (which may well be obvious) that we believe we need to collectively face. 

Customer-centric mindset

We have seen lags (driven by information asymmetry and other factors) in how low-income communities tend to process and internalize shocks (at close quarters), whether after demonetization or the microfinance crisis in India, or macro-economic or regulatory decisions, etc. Given that customers are a critical stakeholder, we would encourage you to personally establish multiple touchpoints with your customers and more importantly, to orient (or re-orient) your organization to pick up signs from the ground. These observations will likely evolve over time and will need a sustained effort. In our experience, this will help all of us to be discerning in understanding the ground realities of our customers – many of whom will face economic shocks, will have no option but to go to work, etc. 

People Leadership

What has held organizations in good stead is a focus on people’s interests, field staff upwards. Several field staff are likely to belong to customer segments that your company serves and in our experience, if they remain confident in your entrepreneurial journey, the company does better. While it is an easy decision (and a seemingly obvious one) to scale back on team sizes and demand productivity ramps, what is a true test of the character of your organization is a ‘collective’ response that protects the interests of team members. This preserves and reinforces their confidence in the brand you have built and leads to innovative and transparent measures – consistent with organizational needs and what “performance” means in this environment. How you think about your people, how you ensure they know you are thinking about them, and how the team is pitching in towards collective organizational and personal resilience – all three are equally important questions to answer. 

Company Overall

Needless to say, in uncertain times, Plan A needs to be closely followed by Plans B, C and D. Annual operating plans will need to be reviewed, even if recently approved. You may well determine that no changes are required, but scenario planning is essential with an ability for quick decision making. Unfortunately, it is rather obvious, that capital sources are being cautious and so like they say, it is never done till money is in the bank (for both debt and equity). Rounds will take longer (if they happen), valuations will certainly drop, folks will put off diligence trips – and so planning for this period and for potential lead periods is critical. 

Things to Consider

Keeping all of the above in mind, some things to consider (not at all exhaustive): 

  • Creating an internal task force to take decisions in connection with business, risk management, crisis management, information sharing and education efforts,
  • Developing plans (including annual operating plans) that practically balance customer engagement, employee support and organizational interests,
  • Engaging and educating customers proactively (given the risks they may carry) – covering issues of prevention, symptoms, and potential responses,
  • Thinking through possible product constructs to support customers that face difficult times while being discerning about which customers you double down on,
  • Re-visiting “business continuity plans”, inclusion of “work from home” protocols,
  • Understanding implications of supply chain disruptions,
  • Evaluating implications of material contractual relationships where the counterparty could run into problems or you run into problems,
  • Taking proactive measures in relation to the safety and connectivity of staff and customers at an individual level (including those who may be high risk), including education on social distancing professionally and personally (for example, many of your staff may stay at hostels and parents with kids at home due to school closures – and will face stress),
  • Considering implications of all your stakeholders implementing cash conservation strategies,
  • Engaging with lenders pro-actively on issues of business performance, anticipated risks and your ability to manage difficult situations,
  • Ensuring that you have a version of your annual operating plan which ensures cash availability for a period of 12-15 months in a capital-constrained world,
  • Engaging with your board on the measures you are taking.

Shared Purpose

We have always felt a sense of pride as we look back on multiple instances of collaboration and camaraderie across our entrepreneurs – whether it was collective action during the microfinance crisis or demonetization in India, or interactions between companies as we have seen recently at the Beyond Discussions in India and Latin America. We believe this is fairly unique in the world of investing and we would love to build on this shared purpose and encourage all of you to share best practices and support each other (even across regions) – and so we look forward to facilitating similar conversations to help navigate the coming months, and would encourage you to reach out directly to each other. To this end, we would love to hear (and learn) from each of you on the following:

  1. As leaders of influential organizations focused on low-income customers (mass markets), we would love to understand ways in which you are planning to engage and educate your customer base. We have some admirable instances from the past which we would be happy to share.
  2. Best practices on the unique challenge of taking care of team members while conserving, and maximizing, cash runway for your business. This could include basic internal communication to team compensation structures.
  3. Contacts and relationships that you believe could be useful to other portfolio companies, in these difficult times. 

Look forward to hearing from you – and stay tuned for additional communications. Let’s double down (not cut back) on our core values  – and on our entrepreneurial journeys. And yes, thank you for your leadership. 


The Elevar Team