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<div class="kl km kn"><picture><img class="bg ky kz c" role="presentation" src="https://miro.medium.com/v2/resize:fit:700/1*UvNMQiSHQDSwTfuDATKFVQ.png" alt="" width="700" height="394" /></picture></div>
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<p id="53bb" class="pw-post-body-paragraph la lb ev lc b ld le lf lg lh li lj lk ll lm ln lo lp lq lr ls lt lu lv lw lx eo bj" data-selectable-paragraph="">User experience (UX) plays a pivotal role in determining the success of a website or application. A seamless and intuitive user interface can lead to increased engagement, customer satisfaction, and ultimately, business growth. One valuable tool in optimizing UX is the UX audit. In this blog post, we’ll explore the process of a UX audit, drawing insights from a YouTube video, guidance from a senior UX professional, and the experience of conducting UX audits to improve our skills while teaching a fellow UX intern.</p>
<h1 id="9ac1" class="ly lz ev be ma mb mc md me mf mg mh mi mj mk ml mm mn mo mp mq mr ms mt mu mv bj" data-selectable-paragraph="">Understanding UX Audit</h1>
<p id="e305" class="pw-post-body-paragraph la lb ev lc b ld mw lf lg lh mx lj lk ll my ln lo lp mz lr ls lt na lv lw lx eo bj" data-selectable-paragraph="">A UX audit is a systematic evaluation of a website or application to identify areas of improvement and optimize the overall user experience. It involves analyzing various aspects, including usability, accessibility, visual design, content, and functionality. By conducting a UX audit, we can uncover potential pain points, optimize user flows, and enhance the overall interface.</p>
<ol class="">
<li id="7ec1" class="la lb ev lc b ld le lf lg lh li lj lk nb lm ln lo nc lq lr ls nd lu lv lw lx ne nf ng bj" data-selectable-paragraph=""><strong class="lc ew">Learning from YouTube</strong>: To gain valuable insights into the UX audit process, I watched an informative YouTube video titled “UI UX Audit Process — How to Stop Skipping Them” on the Headway channel. The video provided a step-by-step approach, highlighting key elements to consider during the audit. These elements included user research, user journey mapping, usability testing, visual design analysis, and content evaluation. By following this structured process, a comprehensive review of the user experience can be ensured.<br />
Headway UX Audit Process link: <a class="af nh" href="https://www.youtube.com/watch?v=vDhfwGkuTIM&amp;list=LL&amp;index=22" target="_blank" rel="noopener ugc nofollow">https://www.youtube.com/watch?v=vDhfwGkuTIM&amp;list=LL&amp;index=22</a></li>
<li id="d502" class="la lb ev lc b ld ni lf lg lh nj lj lk nb nk ln lo nc nl lr ls nd nm lv lw lx ne nf ng bj" data-selectable-paragraph=""><strong class="lc ew">Guided by a Senior UX</strong>: To improve my skills, I sought guidance from my senior UX who had experience conducting UX landing page audits. His expertise helped me understand the nuances of analyzing user interfaces, identifying usability issues, and recommending effective solutions. His mentorship provided invaluable insights into best practices and industry standards, enabling me to conduct more UX landing page/system audits.</li>
<li id="3bee" class="la lb ev lc b ld ni lf lg lh nj lj lk nb nk ln lo nc nl lr ls nd nm lv lw lx ne nf ng bj" data-selectable-paragraph=""><strong class="lc ew">Conducting Free UX Audits</strong>: To further enhance my skills, Our Design department decided to offer free UX audits, allowing me to gain practical experience. These audits allowed me to put my knowledge into practice and refine my ability to identify pain points, suggest improvements, and communicate my findings effectively. The experience of conducting real-world audits enhanced my understanding of the UX audit process.</li>
<li id="740a" class="la lb ev lc b ld ni lf lg lh nj lj lk nb nk ln lo nc nl lr ls nd nm lv lw lx ne nf ng bj" data-selectable-paragraph=""><strong class="lc ew">Learning by Teaching</strong>: To solidify my knowledge and contribute to the growth of the design team, I took the opportunity to teach a fellow UX researcher intern about the UX audit process. By explaining the concepts, sharing insights, and guiding her through the steps, I not only reinforced my own understanding but also developed my communication and mentoring skills. Teaching someone else benefits not only the learner but also the teacher, fostering a collaborative learning environment and promoting knowledge sharing.</li>
</ol>
<p id="985e" class="pw-post-body-paragraph la lb ev lc b ld le lf lg lh li lj lk ll lm ln lo lp lq lr ls lt lu lv lw lx eo bj" data-selectable-paragraph="">The journey of improving our UX skills through the UX audit process has been enlightening and rewarding. By leveraging resources such as YouTube videos, online templates, guidance from seniors, conducting free audits, and teaching others, we have deepened our understanding of UX audit methodologies. Through this iterative process of learning and applying our knowledge, we have grown as UX professionals, equipped with the ability to optimize user experiences and drive meaningful results.</p>


Enhancing User Experience through the Art of UX Audit

<p>You will find many articles/blogs on this topic, covering definitions and processes but in this article I am going to elaborate on what these funds actually into while exploring a business and which business they prefer to invest in.</p>
<p>Being associated with a venture firm for over a year, I have seen many businesses grow but not all are <a href="https://wordpress.highoutput.io/read-for-funding-heres-a-4-point-checklist-to-help-you-get-started/">eligible for investment</a> either (whether that is from a venture fund or private equity or both).</p>
<p>Let’s cover what these funds are: <a href="https://www.investopedia.com/terms/p/privateequity.asp">Private Equity</a> is a pooled fund created by raising funds from institutional investors. It is then invested into various equity and/or debt instruments depending on the fund policy and requirements. On the other hand, Venture Capital is a form of PE that also raises capital from institutional investors – but this fund only invests in equity of early-stage companies or startups.</p>
<p>&nbsp;</p>
<p><strong><u>Similarities</u></strong></p>
<p><strong>Capital</strong></p>
<p>Both funds raise capital from institutional investors known as limited partners in legal terms and the firm distributes profits after earning return.</p>
<p><strong>Goal</strong></p>
<p>Both funds aim to increase the value of the business they invest in and make an exit by selling the stake to the public or in an acquisition.</p>
<p>&nbsp;</p>
<p><strong><u>Differences</u></strong></p>
<p><strong>Businesses</strong></p>
<p>Both funds invest at different stages of a business life cycle. Venture Capital invests at an early stage of the business to boost the business and penetrate the market whereas Private Equity comes in at maturity stage for expansion or at decline stage as distress financing.</p>
<p><strong>Investment</strong></p>
<p>Private Equity usually invests high capital and acquires a majority stake of the business while Venture Capital invests in small chunks and takes less equity stake in the business.</p>
<p><strong>Risk</strong></p>
<p>Venture capital firms face high risk as they invest in early stage of the business thus, they require high return/equity stake in the business. Alternatively, Private Equity comes in the later stages and knows the market and business thus, they face less risk but due to high investment capital they too take away 40-70% stake.</p>
<p>&nbsp;</p>
<p><strong><u>Eligible Businesses </u></strong></p>
<p><strong>Venture Capital</strong></p>
<p>Venture Capital firms invest in early and growth stage businesses and inject capital at various rounds of fund raising by the business. The Venture Capital firm can’t do much due diligence at the early stage of the business because of less historical data available, and sometimes it is unclear what the market itself is until operations begin.</p>
<p>It is presumed that Venture Capital is for technology startups which can be true because of the high risk involved. Investors are looking for high return, and technology is something that can bring exponential growth to a business.</p>
<p>Here are some things VC’s consider before investing:</p>
<ol>
<li>How good the product is and what problem is this product solving that can serve a wider community in the future.</li>
<li>Can the business grow exponentially, especially the gross revenue?</li>
<li>How good and committed the management is with their business.</li>
</ol>
<p>&nbsp;</p>
<p><strong>Private Equity</strong></p>
<p>Private Equity firms invest at a later stage, like mature or decline phase companies that require capital either for expansion or to bailout the distressed business by providing equity, debt or mixed capital. In Private Equity, due diligence is very extensive because of the selection criteria of investment.</p>
<p>Here are some things PE firms look at before investing:</p>
<ol>
<li>What are future business prospects if the business expands to another market or how quickly the distressed business can regain the market share or turn into positive cashflow?</li>
<li>Private equity firms invest in any type of business that has good potential to earn a return for the firm.</li>
<li>Need to have positive cash flow in the expansion equity investment case.</li>
<li>Private equity invests in real estate projects and in other funds of funds too for steady dividend income.</li>
</ol>
<p>&nbsp;</p>
<p><strong><u>DEALS</u></strong></p>
<p><strong>Venture Capital</strong></p>
<p>Aforementioned that Venture Capital firms invest at an early stage of business, so they asked for a higher stake of equity relative to investment amount than PE. Here the investors know how much they are going to invest but the equity stake is formally negotiated with both parties and most of the time at early-stage businesses instead of shareholding agreement parties sign simple agreements for future equity commonly known as SAFE’s.</p>
<p>Depending on agreed terms venture capital firms do take board seats but can participate in reserved matters and do not participate in the business operational strategy.</p>
<p><strong>Private Equity</strong></p>
<p>These deals are more complex than VC deals because of heavy investment and various types of investment i.e equity and debt mix (leverage buyout).</p>
<p>Depending on the fund strategy, some investment deals require share of business profits as well as equity growth. This mostly happens when private equity acquires a majority stake in the business and or invest in real estate businesses. Even for expansion or for distress financing firms require just not a board seat but take part in business and operational strategy.</p>
<p>&nbsp;</p>
<p>Hope this helped clear any confusion you have between the two. If you found it helpful, share it with your friends!</p>
<p>&nbsp;</p>


Private Equity vs. Venture Capital

<p>I have come across many people wanting to do a side business while working a 9 to 5 and even students who want to start earning income as they complete their education. However, there is always the fear of losing money that holds them back because they either have very little to invest or do not know how or where to invest. This kind of thinking often prevents people from taking up good opportunities to diversify income while keeping risks low. Today we will describe a few investment opportunities, what they are, how to invest, and other thing you may have to take into consideration while building your investment portfolio. Taking the extra time to learn to invest is the first step in helping you earn a secondary income, grow your savings, and hedge your wealth against different market shocks.</p>
<p>What kind of investment can this segment do? There is a perception that most investments require huge capital investment, that they require close supervision by investors to ensure growth, or that you would need to hire someone you trust to manage the investments. This discourages people with small monthly savings and fulltime commitments. While this may be true for many investments, there are a lot of opportunities to overcome these barriers which help investors invest small amounts and maintain a portfolio that is appropriate for the time they are able to give to it.</p>
<p>One option is the Financial Markets (FM). Let us first talk about the benefits of investing in FM. The investment amount can be very small to unlimited, and you can adjust your exposure according to the amount of time you can dedicate to this. While some financial background is helpful to understand how the market operates, it is not required. In fact, if you learn about some fundamental concepts, you can start building your market experience which is most important to make investment decisions. As you gain this experience, it is recommended to keep exposure low to reduce risk of big loss while you are still learning. To trade in these markets one needs to open accounts with brokerage firms which provide online platforms for investors to trade in exchange for a small commission.</p>
<p>In simple terms FM are where trade of securities happen; notable securities are Equity Stocks, Forex, Commodities and Crypto assets. The market operates by providing a platform to buyers and sellers to trade their desired security. There are different types of markets and the characteristic of that market depends on the type of security traded in it. Do read out the table at the end to get a quick overview of mentioned markets.</p>
<p>Now, let&#8217;s get an overview of some different financial markets:</p>
<p><strong>Capital market</strong></p>
<p>Capital market is where most equity (stocks) and fixed income (bond) trading happens. These markets help companies and governments raise long term funds by selling their equity (companies) or borrowing money by issuing bonds. The investors buy these stocks/bonds to profit through either capital gain (buy cheap and sell expensive) or dividends/interest payments. The Capital market operates five days a week during the office hours (timings may vary by countries), which means you can do your research and make note of findings after close of normal working hours. This market is less volatile because of defined daily price movement which limits extreme rise and fall of prices. The limit on downside movement can make this market less risky since it gives you time to review your position. These controls have been put in place to prevent market manipulation since this market is easier to manipulate than other FMs. Trading is this market requires more fundamental knowledge (financial analysis) of the company and industry and less practice on technical analysis (analyzing market trends). This market is good for those who would like to invest for long or semi-long term instead of daily trading.</p>
<p><strong>Commodity market</strong></p>
<p>The Commodity market securities are natural resources. These resources can be either hard commodities which can only be mined or extracted such as oil, gold, and other metals or soft commodities which is produce of agriculture or livestock. This market stays open 24 hours, 5 days a week, and is very convenient for the jobholders and/or other individuals as they can analyze and execute trade in their convenient time. To trade in these markets, knowledge of technical analysis needs to be very strong along with some fundamental news of global markets and about the country or asset in which one wishes to invest. Compared to Capital markets, use of margin/leverage (loan from brokers) positions are quite high. However, I would only advise to use margins when you are more than 100% confident of price movement in your favour.</p>
<p><strong>Forex Market</strong></p>
<p>The largest and most traded market is Forex and it is highly liquid. Securities traded here include foreign currency and crypto assets. Like commodity markets this market also stays open 24 hours, 5 days a week. Also similar to Commodity markets, technical analysis is critical to trade in this market. This analysis must be complimented by knowledge of global news. In this market the margins can be up to 900% of the invested capital which means if one has invested $100, he/she can buy $900 worth of securities again recommendation is use margin only when you are more than confident.</p>
<p>I hope this information helps you understand the benefits of investing in FM and some ways to mitigate the risks. The best time to start investing is <strong>now</strong> and as a first step I would recommend you set up an account with a brokerage firm of your choice to start observing the markets. When you are ready to invest, start with small amounts to gain market experience and build up your portfolio incrementally. Participating in different financial markets can help diversify your portfolio so that even if one market isn’t performing, your overall portfolio does not suffer. Enjoy investing!</p>
<div class="table">
<div class="table-header">
<div class="header__item">Description</div>
<div class="header__item">Capital Markets</div>
<div class="header__item">Commodity Market</div>
<div class="header__item">Forex Market</div>
</div>
<div class="table-content">
<div class="table-row">
<div class="table-data"><u>Trading Assets</u></div>
<div class="table-data">Stocks/Bonds</div>
<div class="table-data">Natural minerals (Oil Gas, Gold, Copper ETC) Agriculture products</div>
<div class="table-data">
<ul class="table-unordered-list">
<li>Foreign Currency</li>
<li>Crypto Assets</li>
</ul>
</div>
</div>
<div class="table-row">
<div class="table-data"><u>Transaction Size</u></div>
<div class="table-data">Trillion of $/Year</div>
<div class="table-data">Trillion of $/Year</div>
<div class="table-data">Trillion of $/Day</div>
</div>
<div class="table-row">
<div class="table-data"><u>Cost of Transaction</u></div>
<div class="table-data">Low</div>
<div class="table-data">Low</div>
<div class="table-data">Very Low</div>
</div>
<div class="table-row">
<div class="table-data"><u>Liquidity</u></div>
<div class="table-data">Medium – High</div>
<div class="table-data">High</div>
<div class="table-data">Very High</div>
</div>
<div class="table-row">
<div class="table-data"><u>Operating hours</u></div>
<div class="table-data">Office Hours/5day</div>
<div class="table-data">24 hours/5Days</div>
<div class="table-data">24Hours/5Days</div>
</div>
<div class="table-row">
<div class="table-data"><u>Daily Limits</u></div>
<div class="table-data">Exist</div>
<div class="table-data">Free float</div>
<div class="table-data">Free float</div>
</div>
<div class="table-row">
<div class="table-data"><u>Transparency</u></div>
<div class="table-data">Less</div>
<div class="table-data">High</div>
<div class="table-data">High</div>
</div>
<div class="table-row">
<div class="table-data"><u>Regulation</u></div>
<div class="table-data">Very High</div>
<div class="table-data">Medium – low</div>
<div class="table-data">Lower than other</div>
</div>
<div class="table-row">
<div class="table-data row-item-centered"><strong><u>Factors Affecting Prices</u></strong></div>
</div>
</div>
<div class="table-row">
<div class="table-data"><u>Fundamental</u></div>
<div class="table-data">
<ul class="table-unordered-list">
<li>Management</li>
<li>Financial Reports</li>
<li>Industry Specific factors</li>
<li>Macro-Economic</li>
</ul>
</div>
<div class="table-data">
<ul class="table-unordered-list">
<li>Demand &amp; Supply</li>
<li>Technology</li>
<li>Govt. Policies</li>
<li>Weather Condition</li>
<li>US Dollar</li>
<li>Geopolitics</li>
<li>Global economy and some other</li>
</ul>
</div>
<div class="table-data">
<ul class="table-unordered-list">
<li>Political stability</li>
<li>Terms of Trade</li>
<li>Recession</li>
<li>Govt. debt and policies</li>
<li>Current Account</li>
<li>Inflation and interest rates</li>
</ul>
</div>
</div>
<div class="table-row">
<div class="table-data"><u>Technical</u></div>
<div class="table-data">Market Sentiment (Bulls/Bears)</div>
<div class="table-data">Market Sentiment (Bulls/Bears)</div>
<div class="table-data">Market Sentiment (Bulls/Bears)</div>
</div>
<div class="table-row">
<div class="table-data"><u>Role of analysis in markets</u></div>
<div class="table-data">Major Fundamental and less technical</div>
<div class="table-data">Both Fundamental and Technical</div>
<div class="table-data">Major technical and less fundamental</div>
</div>
</div>


How to create multiple streams of income

<p><span style="font-weight: 400;">During the last week of March, several people in my network started to speak about a new social network called BitClout. I loaded up the website only to find myself looking at a page requiring me to enter a password. </span></p>
<p><img class="wp-image-1872 aligncenter" src="https://wordpress.highoutput.io/wp-content/uploads/2021/04/unnamed-300x97.png" alt="" width="523" height="169" srcset="https://wordpress.highoutput.io/wp-content/uploads/2021/04/unnamed-300x97.png 300w, https://wordpress.highoutput.io/wp-content/uploads/2021/04/unnamed.png 512w" sizes="(max-width: 523px) 100vw, 523px" /></p>
<p><span style="font-weight: 400;">Being quite familiar with crypto-based projects, this didn&#8217;t deter me. On the contrary, it piqued my interest further. Eventually, I found my way, and was faced with a familiar-looking interface. </span></p>
<p><img class="wp-image-1873 alignleft" src="https://wordpress.highoutput.io/wp-content/uploads/2021/04/unnamed-2-300x201.png" alt="" width="343" height="230" srcset="https://wordpress.highoutput.io/wp-content/uploads/2021/04/unnamed-2-300x201.png 300w, https://wordpress.highoutput.io/wp-content/uploads/2021/04/unnamed-2.png 512w" sizes="(max-width: 343px) 100vw, 343px" /><span style="font-weight: 400;">For the unassuming eye, their first interaction with BitClout feels familiar. You scroll through a twitter-like feed with very similar mechanics. What stands out immediately is the dollar figures all over the place with strange buy options next to the handles.</span></p>
<p><span style="font-weight: 400;">It took me a while to figure out how they were calculating the prices of coins for each individual and how the network worked, BitClout is a network that directly rewards users and creators who have their own coins known as &#8216;creator coins.&#8217; </span></p>
<p><span style="font-weight: 400;">Anyone who makes a profile on BitClout has a creator coin linked to the profile, and people can buy/sell the coins. The coins have a built-in appreciating price auction (so they basically go up in value as more people buy and more coins are minted) and everyone on the platform has an incentive to share and promote the profile they support. </span></p>
<p><span style="font-weight: 400;">Personally I don&#8217;t think the financial mechanics are as important as what BitClout represents. </span></p>
<h2><span style="font-weight: 400;">How Social Networks have Evolved</span></h2>
<p><span style="font-weight: 400;">When one looks at how social networks have evolved over the years, the following is a high-level guide:</span></p>
<p><span style="font-weight: 400;">V 1.0: Sharing what you are doing right now with friends and family.</span></p>
<p><span style="font-weight: 400;">V 2.0: Algorithmically shared global content and interest groups.</span></p>
<p><span style="font-weight: 400;">Traditionally social networks have been controlled by a single company that benefits by capturing all the data and monetizing it. They also have complete control over who stays on the network, and they can censor or ban accounts with a single decision. </span></p>
<p><span style="font-weight: 400;">From my perspective, the next version of social networks are going to break away from centralized control. That is what interests me with what BitClout has built.</span></p>
<h2><span style="font-weight: 400;">BitClout is a Peek into the Future</span></h2>
<p><span style="font-weight: 400;">V 3.0: Decentralized social networks </span></p>
<p><span style="font-weight: 400;">A decentralized social network is one where no one company has control. Everything is committed to a blockchain, and anyone in the world has access to and can query the data. </span></p>
<p><span style="font-weight: 400;">BitClout is a prototype of what the future may hold. Developers can go to </span><a href="https://explorer.bitclout.com/"><span style="font-weight: 400;">this link</span></a><span style="font-weight: 400;">, and query any person&#8217;s account and get data on their activity. </span></p>
<p><span style="font-weight: 400;">The access to this data has attracted several developers and teams to start building on the platform. Some of my favourite examples of projects that have launched in just the last three weeks are:</span></p>
<ol>
<li style="font-weight: 400;" aria-level="1"><a href="http://www.subclout.com/"><b>Subclout</b></a><b>:</b><span style="font-weight: 400;"> This project is similar to Substack, where creators can send out newsletters to their followers and coin holders.</span></li>
<li style="font-weight: 400;" aria-level="1"><a href="http://www.bitclouthunt.com/"><b>Bitclouthunt</b></a><b>:</b><span style="font-weight: 400;"> It’s similar to Producthunt and has a list of all the projects created on the platform. </span></li>
<li style="font-weight: 400;" aria-level="1"><a href="http://www.bitswap.network/"><b>Bitswap</b></a><b>: </b><span style="font-weight: 400;">A payment gateway that enables people to convert their BitClout coins to Ethereum. </span></li>
</ol>
<p><span style="font-weight: 400;">These projects have all raised funding, and the pace of development on the network has been amazing to see. </span></p>
<p><span style="font-weight: 400;">High Output Ventures has also launched a project in this space called <a href="https://www.signalclout.com">Signalclout</a>. </span><b>At Signalclout, we are building a single source for truth for investors and product owners to get daily updates on what their known collaborators/investments are doing on the BitClout platform.</b></p>
<h2><span style="font-weight: 400;">What the Future Holds</span></h2>
<p><span style="font-weight: 400;">While Bitclout may not be the next iteration of what social networks will look like, it does give us an idea of what could be. For those who remember the early days of Orkut and Friendster &#8211; They were the first forays into the world of social networks.</span></p>
<p><span style="font-weight: 400;">Each of those networks had features and structures that have survived as part of today&#8217;s major social networks. </span></p>
<p><span style="font-weight: 400;">What has become more evident to me after my short exploration into this world is that decentralized social networks are inevitable. They open up questions such as:</span></p>
<ol>
<li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">How will moderation of content work on a decentralized network?</span></li>
<li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">How will curation of global feeds work? </span></li>
<li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">How will the network work on getting consensus on how they want to improve the core network?</span></li>
</ol>
<p><span style="font-weight: 400;">These are all fascinating questions, and over the next couple of years, we will most likely see a lot of innovation to solve them.</span></p>
<p><span style="font-weight: 400;">For anyone who is interested in learning more about the vision of the initial founding team, </span><a href="https://docs.bitclout.com/the-vision"><span style="font-weight: 400;">this document</span></a><span style="font-weight: 400;"> they have put together is a great place to start.</span></p>


The decentralization of social networks


<p>On March 5, 2009, the Dow Jones Industrial Average closed at 6,594.44, a total decline of 53.4% from its previous peak close on October 9, 2007, marking the lowest point since April 15, 1997. The Global Financial Crisis was in full swing.</p>



<p>Something else also happened in March 2009. In San Francisco, amidst the chaos, a company called Ubercab was founded; a company that aimed to disrupt the way we think of short-distance travel forever; a company that became a household name across the world in a matter of years.</p>



<p>Uber was not the only one to emerge out of the flames. Airbnb (founded in 2008), Whatsapp (2009), Pinterest (2009), Instagram (2010) and Zoom (2011) were all launched out of the US during this time. Globally, Delivery Hero (Germany), Careem (Dubai), Byju’s (India), Paytm (India), Didi (China), Careem (GCC), Gojek (Indonesia) and Trax (Singapore) are just a few of the prominent companies that were founded in this period. Here in Pakistan, <a href="http://Daraz.pk">Daraz.pk</a> was launched in 2012.</p>



<p>We’ve been hearing a lot of talk about the impact on venture capital and early-stage investments if another financial crisis is on the cards.&nbsp;In my&nbsp;opinion, a crisis is the best time to invest in early-stage tech businesses, and here’s why.</p>



<h4><strong>A cornered tiger is dangerous; a cornered human is resourceful</strong></h4>



<p>In a financial crisis, people’s livelihoods are significantly impacted. They are looking at layoffs, foreclosures and other hard economic hits to their personal lives. They need to support themselves; they might need to support family and friends. They enter survival mode.</p>



<p>It is natural that in times of crisis, people need to find creative and efficient ways to earn their living. Restless nights, reliance on one’s own talents and a steep learning curve; entrepreneurship thrives in these conditions, and the strongest entrepreneurs slowly break away from the pack.Investing in an early-stage business in such a time means you are investing in an extremely motivated, highly resourceful, and super-efficient team. A team that is looking to build a real business and cash flow, not a team for whom the next fundraise is the only KPI. This team will use every dollar of yours to extract maximum value.</p>



<h4><strong>The slowest in the group dies first</strong></h4>



<p>Predators target the slowest runner. Similarly, a shock to the financial system hits large corporations first. The organizational charts of these companies look like the metro map of a small city. There are levels upon levels of hierarchy, and all their systems – from supply chain to business development to human resource to financial reporting – are complex and set into place so firmly that these companies are extremely sluggish to implement any changes required. The operating expenses of these companies are usually quite high as well, which leaves them susceptible to cost increases, supply shortages and/or decrease in demand. To top it off, they are usually deeply embedded in the financial system. Layoffs are inevitable; bankruptcy is probable.</p>



<p>A startup is the complete opposite. It usually consists of a handful of team members communicating in real time, all wearing multiple hats, and making strategic changes on a weekly basis. Testing and pivoting is considered good practice and its negligible penetration of the target market means it has nowhere to go but up, regardless of the general economic conditions. Depending on the business, the team can usually work out of a very limited space and if costs need to be cut further, can move into a shared apartment without hurting operations. Team members understand this is an investment on their part and are willing to be flexible in terms of remuneration as well.</p>



<h4><strong>Disruption solves problems; disruption is deflationary</strong></h4>



<p>In a time when people’s incomes decrease, they naturally gravitate towards the most cost-effective ways to get by. Luxury spending is very limited, even necessities are carefully assessed. People begin to ditch their brand loyalties for cheaper alternatives. As they start eating into their savings, they become less concerned with the quality of products and more concerned with the price.</p>



<p>Although Uber undoubtedly improved the quality of short-distance travel, one of the key attractions for consumers was (and still is) the price point at which they could get from A to B. Traditional taxi services were relatively expensive. With Uber they not only got a convenient booking and friendly drivers, they got it at a discount.</p>



<p>Investing in a startup usually means investing in a commercially viable solution to a problem. In a crisis, there are more problems than there are solutions. That is why there is a lot of opportunity for investors to seek and pick out solutions that could address the problems consumers are facing.</p>



<h4><strong>Social distancing, self-isolation and internet usage</strong></h4>



<p>If we are heading into a financial crisis, it is not the only threat we face. The spread of the Coronavirus continues to grow, and exponential growth in cases is feared.</p>



<p>Although it is hoped that the spread will be contained until a cure is found, precautionary measures are being taken around the world to keep it at manageable levels. This means a lot of people are self-isolating, more are keeping social interactions to a minimum, schools and universities are being closed and more and more companies are directing their employees to work from home.</p>



<p>This means that a lot of things are being shifted online. Online work, online studies, online shopping. While this is great for short term internet usage (Italy saw a 30% spike in peak usage a week into lockdown), the long term implications could be even more exciting for online businesses. Many people are still not comfortable using the internet and smartphones to purchase products or use services. This is particularly prominent in frontier and emerging markets. However, with more and more people staying home, and thus online, they will be pushed to start and increase online consumption. This will result in more openness and comfort towards consumption via online channels, and its effects will remain even after the lockdowns are over.</p>



<p>This creates a unique opportunity for tech businesses to capture new audiences spending more time and money online, especially in emerging markets. Online businesses in Pakistan have already started reporting spikes in sales. Online grocery stores are one of the most prominent, reporting not only an increase in new customers but also a significant increase in basket sizes.</p>



<h4><strong>Shift in the risk-reward equation</strong></h4>



<p>Investing in startups is always high risk, and you will hear investors talk a lot about risk vs reward. In a crisis, though the risk might increase, it can only increase to a certain extent as it is already high. The potential reward, however, increases significantly. This is due to various reasons, but probably the most prominent one is that valuations become much more grounded. Uncertainty means founders become aware that the availability of capital will reduce significantly, and startups will have to compete for the same limited capital. Inflated valuations become less of a problem, which translates to a bigger upside a few years down the line. If one focuses on emerging markets like Pakistan where deals are relatively undervalued already, a lot of opportunity can be found if one takes a closer look.</p>



<p>Quite a few investors fail to see the case for investing in startups during a crisis. Those that do, end up making the biggest returns. And so I have two things to say to early Uber investors. Firstly, well done for seeing the opportunity and making a decisive call at a difficult time.</p>



<p>And secondly, congratulations.</p>


Investing in startups during a crisis


<p>For years, entrepreneurs and founders have been looking for the magic formula to unlock investment. From carefully tailored pitch decks to ‘selling the story’ to, well, outright misrepresentation, founders are always looking for that edge.</p>



<p>As someone who has spoken to hundreds of founders, I still find it surprising that most of them do not make sure they have a few basic but key areas covered before reaching out to investors. Here are four things that you can easily cover that will have a significant impact in your fundraising journey.</p>



<h4><strong>Validation</strong></h4>



<p>‘We had an amazing idea, created an MVP and built a business model around it. We’re all set for investment!’ You feel the hard part is over and now you just need to raise money to scale. However, in all of this you missed out one important thing: market validation or, as some call it, proof of concept. We see a lot of founders skip this step and go straight to raising investment, and thus fail to do so. Investors want to see execution and actual proof that your product has the potential to achieve product-market fit.</p>



<p>To put it simply: no one cares about how good you think your idea is. If you can’t back it up with some traction, you will have a very difficult time raising money. Spend time putting your product out there, gathering data and feedback and refining everything. You will be in a much stronger position when speaking to investors.</p>



<h4><strong>Know your numbers</strong></h4>



<p>‘Let me get back to you on our financials after checking with our finance person. Personally I don’t have a finance background and numbers scare me!’ I can’t tell you how common this is to hear from founders and how big a red flag it is. As a founder, and often CEO, it is your job to have financial information about your business at your fingertips.</p>



<p>You are asking investors to put money into your company. How likely do you think it is for someone to take a bet on you if they feel you don’t take any interest in the management of the company’s finances? It doesn’t matter if you have a background in tech, health or any other field – knowing your company’s numbers inside out is your responsibility as a founder.</p>



<h4><strong>Test assumptions</strong></h4>



<p>‘We have decent revenue with minimal marketing. Imagine what we could achieve if we increase our marketing budget!’ As a startup looking to raise funding, how many times have you said this to investors, or thought this? On paper, this seems like a good argument. Surely marketing is directly related to sales, and thus increasing marketing expense will increase sales. But how do we quantify this? How do we say that x% increase in marketing will result in y% increase in sales? Unfortunately, ‘imagining’ isn’t enough. You need to go out there and test this assumption. Even if you increase your marketing by a nominal amount, you can gauge the impact on revenue and have actual data to back up your claim.</p>



<p>‘In the last quarter, we increased our marketing budget from $100 to $150 to test it out. It resulted in our monthly revenue jumping from $1,000 to $2,000!’</p>



<p>Does this sound better? Of course it does.</p>



<p>Marketing here is just used as an example. This can be applied to almost any assumption you make. Here are some more:</p>



<p>‘We are about to launch a new product/service. Our customers will love it!’</p>



<p>‘Companies similar to us in other countries have done very well, validating our business model.’</p>



<p>‘We are about to go completely cashless and don’t expect our sales to suffer significantly.’</p>



<h4><strong>Have a Clear Capital Deployment Plan</strong></h4>



<p>‘We will use this money for hiring, marketing and moving into a bigger space. We should have a runway of at least 18 months.’ While this is a decent opening statement when explaining to investors where their money will go, unfortunately most founders don’t go any further. When probed, it is revealed that the founder didn’t actually think this through, which points to them not understanding how to extract value from the investor’s money.</p>



<p>What positions will you hire? In what months? Why do you need this person? What are the KPIs for this position? What will be this person’s output and contribution to overall objectives?</p>



<p>What is the marketing strategy? Do you have a clear plan or will you just spray and pray? Do you have data to back this plan up? How will the results be tracked and how will success be measured?</p>



<p>Why do you need to move into a bigger space? Is the location important? What is the breakup of costs that you will incur, both capital and operational? What are the benefits against this cost?</p>



<p>These are just some basic details you need to think about for each item you are planning to use the money for.</p>



<p>Raising investment is hard as it is. Don’t make it harder by failing to cover these basics before you put yourself in front of investors. You’ll be surprised how much your chances of securing funding increase if you think through things in detail and come prepared.</p>
