Evive’s Prashant Srivastava shares tips for growing a business during a recession

In 2007, Prashant Srivastava and Peter Saravis founded healthcare IT company Evive. Less than one year later, the economy went into a free fall, and Prashant and Peter found themselves trying to survive as a young startup during a major recession.

Despite those early challenges, today, Evive is a leader in the benefits navigation space: The company, which uses predictive analytics and behavioral economics to change the way employers offer benefits, has more than 300 employees and serves more than 4 million people around the world.

Evive CEO and co-founder (and former Tales from the Trenches guest) Prashant Srivastava recently joined us for a virtual conversation about what the journey from 2008 to now was like for the Evive team. We spent some time digging into the lessons learned, what strategies Prashant is employing today to keep Evive healthy and well, and his advice for other startups navigating through these unique and uncertain economic times.

Here are our key takeaways from that discussion. Responses have been edited slightly for length and clarity.

Staying relevant during COVID-19 — and any crisis

Survival strategies: Focus on cash flow, but don’t forget the long term
“Step one is to identify your defensive strategy.

“As a startup in 2008, we had a limited amount of cash and a little bit of revenue. We had our first and second customers, but that revenue was nowhere near what it would take for us to make payroll, so we knew we had to conserve cash.

“We’d actually been fortunate to have raised about $600,000 just before the crash happened. We knew that we wanted to have enough runway to make it 18 months, so Peter and I had to cut our own wages and the consultant we had been using to make sure that we were prepared — that no matter what happened, we would make it through.

“Step two is the offense: Ask yourself what you need to do now so that when you come out on the other side, you’re better off and ready to grow.

“For us, that didn’t mean investing new money. What we did was take our tech force and focus it on a narrow set of solutions — with a focus on building those solutions out much farther. When you’re very early in revenue and you don’t have a good product-market fit or understanding, you’re trying to do everything your early prospects ask for. Instead, we had to say no to some of those requests because we only had limited bandwidth, with no way to expand it. We told our prospects that we were trying to conserve cash, but we were going to put that bandwidth to work on things that we think will put us ahead of the curve in the future.

“That’s the bet you take. Even today, I’m doing a similar thing. We’re cutting things and conserving cash, but we’re also investing in our core and focusing on a narrower set of opportunities to make sure that we’re getting the most out of our workforce there.”

Know when it’s time to press on, fold or pivot
“This is a legitimate question that every entrepreneur has — and not just in recessions. We have these existential crises; we ask, ‘to be or not to be?’

“This is a legitimate question that every entrepreneur has — and not just in recessions. We have these existential crises; we ask, ‘to be or not to be?’ “

“In my last interview at MATTER, I shared this: That entrepreneurs are inherently optimistic. We think of our ventures as a high probability game, when they’re actually a low probability game. You have to believe that there is a future in your idea. Fundamentally, perhaps things are slower for your business now, but you have to believe that there is value in what you’re creating and that people will want to pay for it. If you don’t, then that’s a different problem.

“If you feel like this isn’t a good idea — not just for today but in general — and you have that realization as part of your analysis in a recession or a pandemic, then you can always pivot to something you think is better. And you can do it right now. That’s always an option as you’re trying to find your product-market fit. Be honest with yourself.”

Understand the needs of your customers and the market
“The good news is that if you have even a single customer, you have some sense of the market: You’re listening to them for what they’re looking for now, and you’re also testing the value of what you’re already providing. That’s a great place to start.

“Even today at Evive, we’re still listening very carefully to customers because we know that the post-COVID world will be different from the pre-COVID world. Even if we thought we were doing great before, the world just changed — and it has likely changed permanently.”

“Even today at Evive, we’re still listening very carefully to customers because we know that the post-COVID world will be different from the pre-COVID world. Even if we thought we were doing great before, the world just changed — and it has likely changed permanently.”

“Ultimately, the buck stops here: At the end of the day, I have to be the one to make the decision on what we’re going to do based on all of these inputs. The good news is that in an agile world, you can take incremental steps.

“One of the things we’re doing is taking the time now to work on making our back end more nimble and more service-oriented so that we’re ready to do anything the world requires of us. We’re utilizing the time we have now to do that kind of work — and not just on our technology but also on our sales marketing strategies. We’re taking this pause to identify the launching pads that can help us grow tomorrow.”

Approaching a new, slower sales cycle

Prepare for a slowdown in the sales cycle
“Like in 2008, big corporations are pulling back in terms of spending. Right now, they’ll be looking for solutions that are either a must-have or that show an immediate ROI. If you’re making something that has a slightly longer-term ROI or is a little harder to prove, or there’s something that optimizes a current process but requires new investment from them, you’ll still sell it, but the sales cycle will be much longer. That’s what happened in 2008 — as credit markets got tighter, deals slowed down. It wasn’t like we wouldn’t sell it at all. We just ended up making an already long enterprise sales cycle much longer. Uncertainty breeds inertia. It causes customers to believe they’re fine just where they are.

“Uncertainty breeds inertia. It causes customers to believe they’re fine just where they are.”

“In 2008, we started this business messaging to people around prevention: the value of getting mammograms, colonoscopies and so on. While that’s good, there are plenty of companies in America that work fine without their people remembering every mammogram and every colonoscopy. There’s ROI there, but the ROI is a multi-year problem. We predicted a slowdown in sales and said, ‘Look what we thought was going to last us six to nine months for the next milestone needs to last us 18 months.’”

Get creative in how you engage your customers and sales pipeline
“In 2008, we only had five customers, so we overserved them. We were always creating proof points — every three months we would go back and display new results. But back then, our customers were not overwhelmed like they are today.

“In 2020, our buyers are overwhelmed. Their employees are all remote. Suddenly they have to figure out how to deliver care to these people when the healthcare system’s falling down. They’re focused on providing value to prospects in new ways. And we obviously can’t be cold calling them. We’ve dialed back all business development.

“What we have done instead is build things that prospects, and the world in general, find value in. One of the first things we did for the COVID-19 crisis was develop Evive.care, which is a public website that allows anyone to find a testing site near them. What that allowed our sales folks to do is to reach out to our prospects and consultants and channel partners and say, ‘Look, this is not about selling. This is not that moment. But we positioned our technology to help you. You are free to use this.’

“That and other initiatives has allowed us to at least get back in front of customers and remind them that we exist — that we’re a great technology business that’s designed to use technology for good health. What we’re trying to do is turn our resources into things that anyone can use in the moment that they need it most. I wouldn’t say that we’re selling today, but we’re staying relevant — and we expect that when our customers have the time of day later that just staying relevant would have mattered.”

“I wouldn’t say that we’re selling today, but we’re staying relevant — and we expect that when our customers have the time of day later that just staying relevant would have mattered.”

Caring for and rallying a remote team

Practice regular communication and transparency
“Very early on in the pandemic, I started writing email updates to the company and I laid out the basic principles that everyone at Evive should be guided by.

“One is transparency: We tell everybody what we’re thinking about and what we’re going to do as an organization. Two is conserving our capacity to delight customers. Three is preserving this ability to innovate in a post-COVID world. I think people appreciated that framework over time because as we took new measures, like cutting marketing spend or shutting down product lines to focus on the core products, it helped them to understand why we made those decisions.

“The transparency part I can’t stress enough — because people want to know the truth. In our all-hands meetings, we make sure to always transparently share updates across the company so that people feel connected and like they’ve been given the truth. To give them a totally rosy picture: not helpful. To give them gloom and doom: also not necessarily helpful, because the uncertainty window is just so big.

“Sharing some realism along with specifics is the balance that we all aim for. You gain credibility by providing the unvarnished truth — whether that’s good or bad depends on the day, but I think we’ve learned the value of this.”

Help employees manage stress
“Everyone right now is experiencing stress in different ways. Our new normal is that our work and our lives have become sort of intertwined. At Evive, we’ve gotten creative with how we engage with and care for employees virtually and work to keep the Evive spirit together.

“In these times, all I ask the company to do is take care of themselves. We encourage vacation today, because vacation does not always have to be outside your home — a staycation can make a difference too. I also encourage people to seek professional help today and am transparent that I have a personal therapist. I also make sure to randomly check on five employees every day on Slack. At the end of the day,most employees feel connected when you genuinely care about them. Deliberately making an effort to show them that, now more than ever, is important.

“At the end of the day, most employees feel connected when you genuinely care about them. Deliberately making an effort to show them that, now more than ever, is important.”

Use your values systems as your guide
“Transparency has always been at the core of our company, and it always remains. Our people are sort of battle-tested — they expect a certain level of transparency and hold a certain level of trust with us. In 2013, we coined our values and expectations into what we call ‘the Evive way’, just to make sure that people coming in the future would deliberately be upheld to that. And we really live those values and keep them every day. I’m so glad we formally coined them in 2013. That framework has allowed us to have this language we can always go back to, even in tough times.”

Want to hear from more seasoned entrepreneurs like Prashant? Join us for our next Tales from the Trenches with Khan Siddiqui, CEO of Hyperfine.