What I learned before helps me now.
In the beginning of the 2020 lockdown, venture capitalist Bill Gurley tweeted, “I am living through my third “reset” in Silicon Valley. Reputations are built in hard times, not the easy times.” We are living through a tough time indeed, and it’s good to be able to put it all into perspective.
I realized that this is actually the fifth economic reset I’ve lived through to date. I have “extras” because I grew up in the Soviet Union. That empire’s fall thirty years ago gave a much younger me a quick course in economic reality as I watched my single mother work multiple jobs to keep our family together. Many of my childhood friends did not fare as well as I did. More on that later.
When the shelter in place started I wrote an article about how one of our customers called and requested an urgent acceleration in their onboarding because of the pandemic. My team and I were excited that our company, like Zoom and others, was poised to provide much-needed services during this pandemic. We could help others conduct business in a safe way by digitizing real estate transactions, eliminating face-to-face interactions.
The happiness, however, was short-lived. Thе coronavirus brought a lot of stress to my company and there are not many tools to help entrepreneurs like us through it. So I’m sharing what I’ve learned and hoping that it will bring comfort to those of you who are facing similar challenges.
The most important thing I learned from previous economic resets, including the crypto “boom and bust”, was this – the most unexpected things can, in fact, happen. One of the crises made me wealthy (for a time), another made me believe in decentralization, the rest made me start over. They all, however, taught me that in order to mitigate the unknowns it’s best to act early and decisively.
Economic Reset #1 – The 1991 Collapse Of Soviet Communism
In 1991 I lived in a small northern Russian town, not too far from Finland. It was full of engineers that serviced a nuclear power plant. When communism fell the economic turmoil was devastating – almost everyone lost the opportunity to earn real money.
Many people simply gave up. Unable to earn in this new free for all economy and with little opportunity, many turned to alcohol. Family friends died. Some of my friends – children – found themselves in chaos and were forced to grow up years before they normally would. All families I knew including mine seemed to be quite content with life before the collapse. Previously healthy and happy kids whom I played with were suddenly faced with early teen pregnancies and subsequent abortions. Some young girls went into prostitution. The world, our world, was collapsing all around us.
My single mother despaired along with her friends in similar circumstances. Instead of giving up, they put up advertisements all over town, on freezing winter nights, to offer construction services. For someone growing up in communism, this entrepreneurial spirit felt more than odd – almost wrong in some way.
My mom was always out working for a few more kopeks to buy food. Raising my younger brother fell to me, the oldest. In my free time between school and taking care of my brother, I helped to grow vegetables, to collect wood for construction in the snow on the streets – usually at night so no one would notice.
What really helped then was my mother’s endless positivity and entrepreneurial spirit. My mother was independent and strong in the face of adversity. She not only kept us fed, but she also showed me what being a woman was all about, not having to rely on anyone. I realized this only recently, after moving to the US.
I also learned that there is no such thing as a perfect life. Everything can be going well for years (or your whole life if you’re a child), and then suddenly something happens, completely outside of your control, and you have to deal with it and adapt, or give up. I chose to be like my mom. I chose to never give up.
Economic Reset #2 – The Russian Financial Crisis Of 1998
In the west, many had to deal with the 2001 financial crisis. That didn’t affect me, but the Russian financial crisis a few years earlier certainly did.
It was August 1998, I just got to the dorms at the university (with few borrowed clothes, my red reading lamp, and my dear thick encyclopedia), where I’d spend the next couple of years learning to code. I was about to turn 18 years old and full of hope for a great start to adulthood.
When I was younger, my parents divorced. At the time they decided to sell one of two apartments (provided by the government) and to put the funds into a savings account for the kids. When I turned 18, I would be able to have the money from the sale. But that August news began quickly spreading. People were panicking. Why? Because seemingly overnight the Russian Ruble lost 90% of its value relative to western currencies. So instead of a fortune, I inherited enough to get a couple of chocolates (which is exactly what I did).
Once again I had to face all the advantages of not having money. I had to learn how to borrow and return money. I had to suddenly look for a job and was teaching English. A big advantage that I had was that I didn’t have to pay for the university or the dorm. I even received a small stipend. I realized that I had to forget previous expectations, work hard, and start over with new ideas about the future.
As a result, I was able to leave school educated and unencumbered by debt. This meant that I could risk launching my own ventures instead of focusing on finding stable income. Few years later I launched my first business.
What I really felt bad about were the millions of people in our country that lost all the money they had. This, by the way, should give you some insight as to why I am a supporter of Bitcoin. Yes, the currency can be very volatile as well (though it has seen steady growth since its invention), but you have the control of the ownership and no government can interfere with it. Now when governments dilute national currencies to address the COVID-19 crisis, the decentralized currency concept is more relevant than ever.
This reset taught me to not trust governments, banks and unstable national currencies.
The 2000 Dotcom Bust (But Not A Reset For Me)
While I was experimenting with launching my first venture – building web applications, I did not experience any financial challenges during this period. But I’ve heard from many Silicon Valley folks how similar it was to the crypto bubble bust (read below) and some amazing game-changing companies like Google were born around that time.
Economic Reset #3 – The 2008 Global Financial Crisis
In 2008-2009, I was living in Bulgaria, then a new EU member. I also spent some time in Moscow and London because I was a real estate developer – building and selling resort condo units to customers all over Europe. The way news over the financial crisis spread and the reactions to it were eerily similar to what we are seeing now with COVID-19.
Just like with COVID-19, at first, and despite the international news about the financial crisis, people were conducting business as usual. The reaction came one year later. Only in January of 2009 did businesses in Europe start to take serious measures or collapse, office buildings were empty with many “To Let” signs. I remember worrying that I might have to shut down my successful business which I had been building for years.
In 2009, many of my colleagues who were building housing went bankrupt, on the other hand, I sought out new ideas and identified a new niche – people who used to be High Net Worth Individuals (HNWI) and were accustomed to buying very expensive European properties were suddenly in need of more affordable real estate bought using a stable European currency. My team quickly developed a plan. We’d fly all over Europe and Russia to present offerings to such groups. The rest was a matter of execution.
I spent months analyzing what customers would want in the period of crisis and made an educated bet based on my analysis and intuition. After 6 months of preparations, building and investing, the product was launched and almost sold out all within weeks. All in the middle of the crisis.
By finding and focusing on the right niche, I was able to take what could have been a disastrous crisis and turn it into a multi-million dollar business.
Further, I worked for many years as a tech-driven real estate developer. But I wanted more. The willingness to create a company with a significant impact led me to a very large reset four years ago.
A Personal Reset
We all have those resets in life that are not due to world crises (although sometimes they overlap). In 2016 I moved to the US which, believe it or not, was the biggest reset of my life. I was a single mom. I knew nobody in Silicon Valley. I spent all my money on additional education in Oxford, travel to the U.S. and getting my company started. My daughter and I slept on a mattress on the floor of an empty rented room, saving money for my team.
This personal reset allowed me to launch my current company. It is my big passion and the mission of my career. And thanks to this new beginning, and to many male and female Silicon Valley engineers, founders, investors, and new friends, I have succeeded in securing millions of dollars for my mission – to both deliver innovation and transform the real estate industry. But, the path hasn’t been all clear sailing.
What I learned from this reset is something immigrants building startups should know. Don’t give up, and help people. That kindness and the reputation you build will be rewarded. For female entrepreneurs in Silicon Valley, your first task is to find a local male co-founder. The sad fact is that VCs just don’t back all-female teams no matter what they say publicly (the only exceptions are if your startup is in fashion and/or focused on working with female-focused VCs which also have insufficient backing). And the main lesson from a personal reset – do not be afraid of risk. I risked everything to move for a purpose and never regretted it no matter how hard it’s been.
Economic Reset #4 – The Crypto Collapse Of 2018
In 2017 we experienced the peak of the crypto bubble though many thought it was just the beginning of the blockchain success. Fortunately, my company had a timely, successful token sale (which was a very hard process). Unlike many opportunistic startups in this bubble, my team was executing, making one breakthrough innovation after another.
Many crypto holders were doubling and tripling their investments. All this collapsed in days. Bitcoin and other coins started to lose value. It was painful to watch as the big dreams of many people were collapsing. The majority of crypto holders believed that the drop was temporary. Until it further dropped.
We converted the funds to dollars after our advisory board meeting. Which meant we had enough capital for innovation and product adoption. This crypto bust taught us to decrease attention to opportunistic crypto ideas, events, trips, and blockchain-focused customers and instead start to sell to real, old-school customers – enterprises like brokerages and home builders.
Being amongst crypto enthusiasts was fun and very futuristic but we had to get back to reality. The crisis forced us to. Now, this strategy is paying off. The token with smart contracts are still essential in every transaction, but our customers do not need to know about it (just like internet users do not know about TCP/IP protocol).
Because of previous “resets” I suspected that the crypto hype would be temporary, but I do believe in the fundamentals of blockchain. This is why we use this technology. However, once the market started to lose valuation and attention we could not rely on those early adopters in the space, so we moved to the traditional industry adopters while remaining loyal to our mission – automating homebuying.
Thanks to the crypto market collapse crypto entrepreneurs learned to focus on sellable adoptive solutions and listen to customers that have real pain, instead of utopian ideas. The crypto bubble just like the dot com bubble gave birth to a number of startups, some of them will turn into transformational innovation in the next few years.
Economic Reset #5 – Pandemic And (Hopefully Short Term) Recession
As the pandemic continues, economic activity, including real estate transactions has gone down to a trickle. But as with all economic resets I’ve lived through, there is something to be learned. I and my team are focused on being empathetic and trying to find new ways to help our community, our customers, and each other.
There’s something I love about challenges – it is to solve them. The challenge we face now – to save the most vulnerable among us as well as the economy.
On the other side of this pandemic is a new way of life for all of us. This means that measures like remote work will become commonplace as will the flow of shelter-in-place. The world has already been changed with more and more happening online. But we will go to the virtual world even deeper. Many of us will have an opportunity to contribute to this new world.
No matter where you are from and whether you are privileged or not, each hard period in your life will give you advantages in some way. I still do not know what to expect from the current economic crisis caused by COVID-19, but I do know for certain that if not for my previous resets, I would not be here in the U.S. working on my dream venture.
Source: Forbes – Money