As a startup, how we're dealing with Coronavirus
You'll have no doubt received lots of emails from lots of companies saying how they're responding to Coronavirus and the impacts it's having on their business, customers and teams. I'll spare the usual intro on this topic as you know all this already. Our thoughts go out to anyone impacted by this, especially our customers who've been stuck abroad or had to cancel their holidays. We know cancelled holidays might not compare to the other impacts, but it still sucks.
I wanted to share this note with all our investors and people who follow the company to briefly explain how we're responding to this as a travel business and as an early-stage startup. In the words of another travel CEO “it’s like a giant meteor hit our industry”.
If you're in a rush or like a short summary, then the most important points are:
- Travel insurance is no longer being bought, and won't be until travel bookings return to normal. We've modelled a few worst-case scenarios to see the long term impacts on our sales figures. On the flip side, travel insurance has never been as important, so this might be a positive behavioural change for the future
- Fundraising in 2020 is looking pretty daunting. We did have a funding round originally planned for this year. But now, we need to ensure that we can raise at least 3-6 months later than planned. This means extending our runway wherever possible
- People aren't going abroad, so travel tools for when you're abroad are going to be less useful right now. However, we're already seeing people starting to think about where they want to go when this is all over, so trip planning and travel discovery might still be alive and well. In addition, we want to find new ways to allow people to continue exploring new cultures, even if it's only from their living room
This write up is broken up into; the relevant impacts we're seeing, our immediate actions as a business and how we're making the most of a bad situation.
What's happening and what it affects
I want to focus here on a few important themes and trends that we're observing. You'll probably know all of this, but these are the important points that have driven most of our decisions.
- The situation in the UK is in its infancy, things are escalating quickly and are almost certainly going to get much worse
- Many travel startups are planning for bookings to return to normal in early 2021. And the big players seem to agree with Booking.com and Kayak.com forecasting some pretty scary reductions in travel bookings for 2020
- Travel restrictions from the FCO have quickly escalated and will likely be extended, whilst individual countries are all responding in different ways to protect themselves, making it virtually impossible to travel for the foreseeable future
- There's aggressive financial instability, which has resulted in lots of us, losing money as the value of any investments drop week on week
- VCs will be prioritising supporting their existing portfolio businesses with bridge funding rounds that may not have been even considered over a month ago
- Angels, private investors and even VCs risk appetites will likely take much longer to bounce back than travel bookings and travel confidence
- All these trends and impacts could worsen exponentially and the level of uncertainty on how long it will last might be one of the hardest things for businesses to plan for
- But, there will be a bounce back. After 9/11 this happened, after SARS it happened, after the 2007-08 financial crash this also happened. We're all a rather resilient bunch and when this is all over, people will want to get their lives back to normal, explore the world and experience new cultures. We can't forget this
These views make for sombre reading and are clearly pessimistic rather than optimistic. As co-founders of a business, we feel it's our duty to plan for worst rather than planning for a more optimistic view of when things will return to normal. We may be wrong, but in that case, I think we'd be happy to be proven wrong.
Keeping the lights on
Based on everything above, there are a number of immediate corrective actions we've taken as a business and the consensus from our thinking, from other founders and from VCs is the need to prepare for the worst and make decisions quickly. There are two things we must do as a business in response to this.
Extending our runway
In the words of a prominent travel tech VC “focus on cash preservation”. With opportunities for fundraising in 2020 less likely, we need to ensure the business can run until mid-2021.
With this in mind, we've paused any spending on growth and customer acquisition. This will only be turned back on when behaviours return to normal. And we're pausing outreach for new partnerships as we know travel businesses have enough on their plates right now.
We've also slowed product improvements on our hassle-free travel insurance product. This product is in a strong place, ready for when people begin travelling again. And, we've marginally slowed the development of Pluto Pinboard, this is because we no longer need to be as aggressive around launch dates for this.
Thankfully, we haven't had to make any changes to our team. We're able to shift our focus to other parts of the business and even explore some new opportunities, more on this further below.
Providing the best customer service
This is a difficult and stressful time for many of our customers. They have their own personal situations to consider, but also money that's been spent on holidays that can't happen or that need to be cut short.
All we can do here is to continue to provide the best possible service to our customers in this difficult time. We're working around the clock with extended support hours to do this.
We're also extending the remit of advice we can give, such as how to deal with airlines or tour operators that are being unnecessarily scrupulous, unsupportive or even seeming to forget their obligations under the law.
You can see examples of some of the content we've been sharing with our customers, like what the FCO travel advice changes mean and how you might be covered for Coronavirus related travel disruption.
The Obstacle is the Way
This is the title of one Harry and I's favourite books by Stoic maestro Ryan Holiday. And now more than ever this statement is true. Many things about this situation are far from ideal, or even grave and worrying - but it's an opportunity to test our mettle as a business, as a team and our ability to act quickly, decisively and intelligently. We can't control the magnitude and longevity of this virus, but we can control how we respond to it.
We're lucky to have such an amazing and creative team and I don't doubt that some incredible new ideas will come from this and that this time will be spent incredibly effectively.
We'll continue to design and build our newest product to join the Pluto family. You'll have seen us refer to this a few times and we'll continue to share more and more as this progresses. We're keeping our long term mission and vision alive and strong, and when this is all over, Pluto will be there, ready to help our customers plan the most incredible trips.
Bring travel home
Self-isolating, in quarantine or lockdown - why should this stop us experiencing new things and new cultures? It shouldn't. We're very fortunate in the UK that we have such a diverse range of cultures that we can consume within our homes: cooking new things, ordering from new restaurants, watching new films, listening to new music and appreciating amazing local content completely online.
With that in mind, we'll be focusing on a new destination every week as part of our bring travel home series and sharing ways for you to experience these places regardless of the C-word.
Stay safe and don't stop dreaming about travel.