What We Did & What We Learned
Lon Otremba, CEO
It’s over, right? 2020 I mean.
At least it says so on the calendar. As humans, our natural inclination is to create “eras” that we can compartmentalize our experiences in, relative to time. This is quite convenient when it comes to challenging times, as we naturally seek a point in time when things are past getting worse and are looking better. But it also happens when an obvious end-point on the calendar is reached. When the year ends, we like to say “Well, that’s done, on to the next one.” It doesn’t mean, necessarily, that whatever hell we lived through in 2020 is over, and not going to continue in 2021. But it does mean that we can look back on the year and see how we did, what we learned, and what we can take into the new year to make it better.
Rather than make predictions about 2021, as we normally do at this time of year, let’s take a look back on what we learned in 2020, because nobody, I mean NOBODY, predicted this.
Like a great many companies, Bidtellect was negatively impacted by the effects of the COVID pandemic and the social unrest that erupted throughout the country.
For Bidtellect, the crisis really began to be apparent at the end of February. A couple of high profile industry events in late February were impacted by no-shows and cancellations, as word of the virus began to spread and many people began to be uncomfortable with travel. But the speed of the impact on how business was conducted was unprecedented. It escalated from speculation about what was happening, to cancellation of travel and event plans, to cancellation of advertising spend, in less than two weeks.
For Bidtellect, the impact was particularly dramatic. At the beginning of March, nearly 30% of the ad spend on Bidtellect’s platform was from hospitality and entertainment companies. By March 10th, ALL OF IT had been paused – along with other categories of advertising spend – as ad agencies and their clients assessed what to do next. By the end of March, our revenue had dropped by over 40%. We clearly had a crisis on our hands. We had to react.
And we did. We did a deep and rapid dive with all clients to gather as much data and information as possible to formulate a plan. We learned what the revenue impact would be on our company’s cash reserves and what we could expect about the timing of the ad spend returning.
We made a plan.
Or should I say, we made some assumptions (best guesses?) and then made a plan. Within a week of the ad campaigns cancelling and pausing, we presented to our board of directors three plans. The “high plan” was optimistic about the depths and timing of the ad spend return, the “low plan” assumed the impact would be far deeper and last far longer, and the “middle plan”, intended as the plan we would operate by, attempted to most accurately and soberly reflect what our clients and partners were telling us would happen. We named this the “Crisis Plan” internally. Importantly, the plan called for not laying any of the team off, but it did require temporary salary reductions. While it was a sacrifice, we were able to keep every member of our team.
We raised cash.
Our finance team, led by our amazing CFO, extensively modeled our cash needs through the pandemic, and we determined that we would need to bolster our cash reserves to see our way through the worst of its effects. We then approached our investors with an ask for what we would need to raise. They fully supported the company and we got the cash we would need, ensuring we would not be forced to take far more draconian measures to weather the crisis.
We executed our plan.
Starting April 1st, every operating and financial metric and goal was reset to fully align with our crisis plan. And we stuck to it. We lived with it, ran our business to it, made decisions based on it, and reported all results against it. We actually were able to restore the temporary salary reduction ahead of the timing of our plan because we performed so well. The plan served us well.
We continued to develop our products and advance our technology.
A key aspect of our plan was that we insisted on continued investment in making our platform better. We felt strongly that if we slowed our product and technology work down, even slightly, we would have a much more difficult time ramping up in recovery. Fortunately, we hit all of our benchmarks and our releases were all on time and successful.
We changed how we sell.
As things unfolded, we quickly realized geography would become nearly irrelevant, so we reorganized our selling teams around relationships and brands instead of by region. We had to find ways to move opportunities along and close business solely by remote, electronic means, since our team was not coming to their own offices and none of our customers and partners were going to theirs either. Given that all of our selling activity pre-COVID was largely centered on in-person sales calls and meetings, this was an enormous change. And it is a process that continues to evolve to this day. There were some positive consequences that emerged. We started breaking a higher proportion of new business opportunities, because we focused on replacing categories like hospitality and entertainment (that we didn’t expect to return meaningfully at all until late 2021) with new clients in categories that actually saw increased spend as the crisis unfolded, such as e-commerce and financial services. Finally, we saved a lot of money on travel and entertainment. We gave up office space around the country (we can thank extremely fortunate timing with a couple of leases, particularly in NYC) and saved a lot on rent.
We over-communicate now.
On March 11th, we informed all of our employees that they could work remotely if they chose to do so. On March 17th, we closed all of our office locations and went 100% remote. Since then, we now have a prominent, underlying goal to continuously evaluate how best to work in a remote environment – and communication is key. Internally, externally, with our board of directors, with our investors — we desire to stay closer to everyone than ever before. We encourage every person at every level of our team to over-communicate their needs, their goals, and new boundaries as they juggle working from a new environment with partners at home, kids in virtual school, etc. And we still do.
Looking back, when we made our plan for operating through the crisis, the success of it all depended on the assumptions we made at the beginning about what the rest of the year would look like. Where was the bottom? Would there be a rebound? How long would the worst effects last? What would the slope of the recovery look like? We examined and collected a lot of data, and tried our hardest to make our plans as informed as possible, but in the end, we couldn’t wait for better visibility. We didn’t have the luxury of time. We had to act.
How did we do? I would say we did very well. We finished the year within 2% of our plan on gross profit, 1% better than on operating expenses, and we were profitable each of the last 6 months of the year. And we did all of that without any layoffs or reductions in our team. We continued to make significant advancements to our technology and products, and we had zero turnover in personnel. Moreover, everyone made sacrifices for the long term health and success of the company and it paid off. We made it through.