Corona Q&A
Young Companies Have an Advantage in These Challenging Times, Says StageOne Founder
Yuval Cohen, founder and managing partner at Israel-based venture capital firm StageOne Ventures, answered six questions about the Covid-19 crisis and its effects on the Israeli tech sector
Young companies are more flexible and capable of adjusting to changes in the market during crises, according to Yuval Cohen, founder and managing partner at Israel-based venture capital firm StageOne Ventures. In its attempt to curb the spread of the virus, the Israeli government announced stringent measures, including a ban on gatherings of more than 10 people and a forced shut down of all nonessential businesses, grinding the economy to a temporary halt.
On Sunday, Cohen answered six questions about the crisis and its effects on the Israeli tech sector.
Yuval Cohen. Photo: Orel Cohen
How is your organization addressing the recent government directives?
We have authorized employees to work from home. We are also shifting all meetings with third parties to video conference and keeping a constant communication line with our portfolio companies in order to assist them.
In what ways do you expect the corona crisis to impact your organization in the coming months?
When it comes to our portfolio, we will be more conservative when approving companies’ budgets and operational plans for 2020.
We do not expect to see a change in our investments. StageOne deals with seed and young companies, which usually become an advantage during such challenging times when you need to move and adjust quickly to major changes in the market.
How do you see the corona crisis impacting the Israeli tech sector?
Since Israel's tech sector is dependent on export and is heavily biased in favor of international customers, we believe that if the traveling ban remains for the medium and long term, it will harm this sector.
We also see companies shifting to indirect sales strategies based on online presence and less on face-to-face meetings with customers.
On the potentially positive side, well-funded companies can use the opportunity to invest more in product development and differentiation.
What can be done to minimize the damage?
Adopt more conservative plans, assume sale cycles will become longer, and monitor company activities monthly.
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What are the top 3 rules to follow to endure the crisis?
Keep enough cash in the bank
Prioritize tasks
Try to leverage interesting opportunities that will present themselves as a result of the crisis
Do you believe the coronavirus pandemic will have a lasting impact on social, economic, and cultural norms?
It all depends on how long this crisis persists. If governments will not be able to solve the issue in the short to medium term, this will have a lasting impact on the entire society, for example, by normalizing social distancing.
