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Exclusive: Lessons for the Young Startup Leader: How to Get Through an Economic Downturn

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Lessons for the Young Startup Leader: How to Get Through an Economic Downturn

#Lessons #Young #Startup #Leader #Economic #Downturn

Opinions expressed by Entrepreneur contributors are their own.

We’re hearing it everywhere: Tough times are coming — especially for startups. For some, the challenges are already here. According to Layoffs.fyi, 69 startups had significant layoffs in May compared to only nine in February and four in January. As the market changes rapidly, leaders are preparing for a recession, and that means the race to get cash is on.

But securing cash isn’t the only obstacle ahead. To complicate matters further, the median age of startup founders is 34. That means these folks, along with anyone in their 20s, weren’t part of the workforce during the 2008 recession. Their only experience with large-scale economic downturn was watching their parents tighten the purse strings or get laid off. So, how are younger workers — especially leaders — supposed to prepare for the possible challenges ahead? Look to those of us who lived (and learned) through it.

During the 2008 recession, I had a front row seat to the down market. I was a newly minted sales trader at JPMorgan, watching as stocks plummeted, share prices swung wildly, and the employee experience was anything but secure. It wasn’t pretty, but I learned a few key lessons that go beyond the obvious, like tightening up cash burn. Today, I’m an advisor to high-growth startups, and many of my conversations of late are around surviving a recession. Here are my top tips to help you prepare for bumpy months ahead:

1. Strengthen organizational trust

In order to survive a market dip, you need to have confidence in your leadership team, business strategy and the people you work with every day. When organizational trust is low, it becomes a self-fulfilling prophecy that a startup tanks in a down market. Think of it this way: A company with low trust doesn’t scale in a good market. So, how will it do in a bad one?

You also need to account for the interpersonal challenges that accompany financial insecurity. When people are worried about losing their job, they get paranoid. Cue the finger-pointing, accountability issues and poor business decisions.

Remember: Leaders set the tone. Take accountability for your mistakes, invest in your peer relationships, and avoid throwing others under the bus. This will encourage your employees to do the same. Companies who continue to work together during tough times are more likely to emerge stronger on the other side.

Related: 4 Tips for Starting a Business in an Economic Downturn

2. Model resilient leadership

During economic downturns, leaders need to exhibit strength and endurance. This means keeping your stress private. When layoffs or hiring freezes happen, show empathy and compassion, but don’t catastrophize. The employees who remain will be watching closely — and it’s your job to keep them focused. A great leader’s brain operates like a Trello board with all the company needs prioritized and mapped to the big picture. Get your people up to speed, and march on.

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A resilient leader also knows their team’s challenges and distractions, but doesn’t allow the weight of this to overwhelm them. Stay engaged and motivated. Be clear and thorough with your communication, and remove any obstacles getting in your employees’ way. Feeling stuck on a particular challenge? It’s normal to feel stressed and overwhelmed, but you’re not doing this single handedly. A resilient leader knows when — and how — to ask for help.

Related: How to Prepare Your Business For Economic Downturn

3. Invest in employees with diverse, adaptable skills

During the 2008 recession, my colleagues were getting laid off left and right, and I was constantly having to switch products to stay afloat. Thankfully, I’ve always been a fast learner, and my ability to adapt kept me employed.

One of the best ways for an employee to secure their position is to learn a variety of skills — especially something no one else can do. A strong leader will invest in building their team’s knowledge and abilities so they can adjust to an evolving business strategy and unstable market conditions.

In the next few months, you may need your VP of Customer Success to lead marketing. Sound far-fetched? The truth is, in a turbulent market, employees will have to take on responsibilities that would usually be out of their scope. You need a team who is willing to wear multiple hats. Those who can’t will have to be let go.

If you’re a startup founder under 35, the thought of a down market may feel overwhelming — insurmountable, even — but the good news is, history is on our side. Business cycles happen. Many companies before yours have weathered worse storms. And: There are major safety cushions you can put in place now to increase your chances of surviving. Focus on the three steps I’ve outlined, and you’ll be more likely to come out on top.

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Exclusive: Spirit delays shareholder vote on merger hours before meeting to continue deal talks with Frontier, JetBlue – TalkOfNews.com

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Spirit Airlines says it will decide on competing JetBlue, Frontier bids before the end of June

#Spirit #delays #shareholder #vote #merger #hours #meeting #continue #deal #talks #Frontier #JetBlue

A Spirit Airlines plane on the tarmac at the Fort Lauderdale-Hollywood International Airport on February 07, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Spirit Airlines on Wednesday delayed shareholder vote on its proposed merger with Frontier Airlines until July 8, hours before a meeting scheduled for Thursday so it can further discuss options with Frontier and rival suitor JetBlue Airways.

It is the second time Spirit has delayed a vote on its planned combination with Frontier and extends the most contentious battle for a U.S. airline in years.

Spirit originally scheduled Thursday’s vote for June 10 but had delayed that for the same reasons.

Both Frontier and JetBlue have upped their offers in the week before the scheduled vote approached.

“Spirit would not have postponed tomorrow’s meeting if they felt they had the votes,” said Henry Harteveldt, a travel industry consultant and president of Atmosphere Research Group. Spirit didn’t comment on whether that is the case.

“We compliment the Spirit Board for listening to their shareholders, who clearly were not supportive of the Frontier transaction, and adjourning the Special Meeting,” JetBlue CEO Robin Hayes said in a statement later Wednesday.

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“It’s clear that Spirit shareholders have now handed the Spirit Board an undeniable mandate to reach an agreement with JetBlue.”

“This is like the end of a soap opera episode,” Harteveldt added.

Frontier and Spirit first announced their intent to merge in February. In April, JetBlue made an all-cash, surprise bid for Spirit, but Spirit’s board has repeatedly rejected JetBlue’s offers, arguing a JetBlue takeover wouldn’t pass muster with regulators.

Either combination would create the United States’ fifth-largest carrier.

JetBlue has fired back at Spirit, saying it did not negotiate in good faith, setting off a war of words between the airlines as they competed for shareholder support ahead of the vote.

Frontier didn’t immediately comment about the postponed vote.

Spirit shares were up about 2% in afterhours trading, while Frontier was up more than 1% and JetBlue was down 1%.

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Exclusive: Get hype for the first images from NASA’s James Webb Space Telescope – TalkOfNews.com

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Get hype for the first images from NASA’s James Webb Space Telescope

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Very soon, humanity will get to view the deepest images of the universe that have ever been captured. In two weeks, the $10 billion James Webb Space Telescope (JWST) — NASA’s super expensive, super powerful deep space optical imager — will release its first full-color images, and agency officials today suggested that they could just be the beginning.

“This is farther than humanity has ever looked before,” NASA Administrator Bill Nelson said during a media briefing Wednesday (he was calling in, as he had tested positive for COVID-19 the night before). “We’re only beginning to understand what Webb can and will do.”

NASA launched James Webb last December; ever since, it’s been conducting a specialized startup process that involves delicately tuning all 18 of its huge mirror segments. A few months ago, NASA shared a “selfie” marking the successful operations of the IR camera and primary mirrors. Earlier this month, the agency said the telescope’s first images will be ready for public debut at 10:30 AM ET on July 12.

One aspect of the universe that JWST will unveil is exoplanets, or planets outside our Solar System — specifically, their atmospheres. This is key to understanding whether there are other planets similar to ours in the universe, or if life can be found on planets under atmospheric conditions that differ from those found on Earth. And Thomas Zurbuchen, associate administrator for NASA’s Science Mission Directorate, confirmed that images of an exoplanet’s atmospheric spectrum will be shared with the public on July 12.

Essentially, James Webb’s extraordinary capacity to capture the infrared spectrum means that it will be able to detect small molecules like carbon dioxide. This will enable scientists to actually examine whether and how atmospheric compositions shape the capacity for life to emerge and develop on a planet.

NASA officials also shared more good news: The agency’s estimates of the excess fuel capability of the telescope were spot on, and JWST will be able to capture images of space for around 20 years.

“Not only will those 20 years allow us to go deeper into history and time, but we will go deeper into science because we will have the opportunity to learn and grow and make new observations,” NASA deputy administrator Pam Melroy said.

JWST has not had an easy ride to deep space. The entire project came very close to not happening at all, Nelson said, after it started running out of money and Congress considered canceling it entirely. It also faced numerous delays due to technical issues. Then, when it reached space, it was promptly pinged by a micrometeoroid, an event that surely made every NASA official shudder.

But overall, “it’s been an amazing six months,” Webb project manager Bill Ochs confirmed.

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Exclusive: Fight for Spirit Airlines goes down to the wire with competing bids from Frontier and JetBlue – TalkOfNews.com

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Fight for Spirit Airlines goes down to the wire with competing bids from Frontier and JetBlue

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The most heated airline battle in recent years comes to a head on Thursday when Spirit Airlines’ shareholders vote on a proposed tie-up with fellow discount carrier Frontier Airlines while rival suitor JetBlue Airways circles with increasingly sweetened takeover bids.

Spirit has repeatedly rebuffed sweetened, all-cash bids from JetBlue, arguing that such a takeover wouldn’t pass muster with regulators, and has stuck with its plan to combine in an also-sweetened cash-and-stock deal to combine with Frontier, first announced in February.

JetBlue’s surprise all-cash bid in April set off a fight over Spirit that last month turned hostile.

If Spirit shareholders vote in favor of the tie-up with Frontier, it would put the carriers on the path to creating a budget airline behemoth. The two carriers share a similar business model based on low fares and fees for almost everything else from seat selection to carry-on bags.

A Frontier Airlines plane near a Spirit Airlines plane at the Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

If shareholders vote against the deal it opens the door for a takeover by JetBlue, which would retrofit Spirit’s yellow planes to look like JetBlue’s, including cabins with seatback screens and more legroom.

“JetBlue does not have many options to achieve a step-change in growth, and that explains why JetBlue has pursued this deal so doggedly,” said Samuel Engel, aviation consultant at ICF.

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JetBlue and Frontier have each argued their proposed transactions are key to their future growth, helping them better compete with large U.S. carriers and get fast access to Airbus narrow-body planes and pilots.

Either deal would create the fifth-largest U.S. airline.

Late Monday, JetBlue said it would raise the reverse breakup fee if regulators don’t approve a JetBlue takeover of Spirit to $400 million from $350 million. It also raised the amount it would pay up in advance to $2.50 a share, from $1.50 and added a 10 cent-a-share monthly payment to shareholders starting next year until the deal is consummated or terminated.

JetBlue previously offered to divest some assets in crowded markets to calm antitrust fears, but hasn’t said it would give up its alliance with American Airlines in the Northeast U.S., which Spirit has called out as a sticking point in that deal.

JetBlue’s latest offer came after Frontier late Friday raised the cash portion of its offer by $2 per share to $4.13 and increased the reverse breakup fee to $350 million to match JetBlue’s then-offer.

Spirit has stuck with the Frontier deal. CEO Ted Christie on Tuesday called the Frontier offer “very compelling” and told CNBC the airline wants to “focus our efforts on convincing the shareholders it’s the right thing to do.”

Proxy advisory firm Institutional Shareholder Services on Tuesday said that “the enhancements by JetBlue may be enough to offset the potential upside of the proposed merger with Frontier” but said it didn’t want to change its recommendation in favor of the deal with so little time before the vote.

Spirit postponed the vote from June 10 to continue deal talks with Frontier and JetBlue.

War of words

For weeks, JetBlue has argued that Spirit’s board hasn’t negotiated in good faith or fully considered its offer. It has repeatedly urged the budget airline’s shareholders to vote against the Frontier deal.

“The Spirit Board consistently ignored or refused to engage with JetBlue until faced with certain defeat on the original shareholder meeting date and then, in an attempt to avoid the widespread perception of its poor corporate governance, pretended to engage with JetBlue,” JetBlue said in a letter Wednesday again urging Spirit shareholders to vote against the Frontier deal.

Spirit has repeatedly denied claims that it hasn’t engaged with JetBlue in good faith.

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“Our board believes [the Frontier merger] is the most financially and strategically compelling path forward for Spirit with a greater likelihood of closing,” Christie said in a video message addressing shareholders on Wednesday.

All three carriers have traded heated words as they try to win over Spirit shareholders before the shareholder vote.

JetBlue late Monday wrote a letter to Spirit shareholders detailing its latest sweetened bid and accusing Spirit of making “misleading statements” regarding its antitrust doubts.

Frontier fired back in a lengthy news release Tuesday saying that “a Spirit acquisition by JetBlue would lead to a dead end — a fact that no amount of money, bluster, or misdirection will change.”

The high drama is coming from an already-consolidated industry that hasn’t seen a major airline deal since 2016, when JetBlue lost out to Alaska Airlines for Virgin America.

“This is as much as a potboiler for the summer than any trashy novel,” said Henry Harteveldt, a former airline manager and president of of Atmosphere Research Group.

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