PR for African Startups is a monthly column contributed to TechCabal by Claudine Moore, an award-winning global PR leader specialising in Africa-focused PR and communications across multiple sectors, including tech. She is the managing director, Africa, Allison+Partners, and founder and former CEO of C. Moore Media International Public Relations. She also founded the The Future is Female Mentorship Program, the first and only PR and communications initiative dedicated to African female tech founders.
You can follow Claudine on Twitter @ClaudineMoore.
A month ago Silicon Valley Bank (SVB) became the second-largest bank failure in American history and it sent shockwaves throughout the global tech ecosystem, with African tech startups facing significant repercussions. The collapse of SVB yet again highlights the importance of having an effective, up-to-date and easy-to-mobilise crisis communications strategy and plan in place.
This month’s post will delve into the African tech startups implicated in the crash, analyse their public statements, and identify valuable best practices and lessons from other organisations.
Over the past few years, the SVB has invested in more than 50 African companies, with Andela, Chipper Cash, and Paystack being among the most high-profile of them. The crash, triggered by a series of risky investments and regulatory issues, has left these companies grappling with the challenge of handling the crisis while preserving their brand reputation.
In response, the affected African tech startups have issued public statements reflecting varying degrees of transparency and proactivity. For example, Chipper Cash, valued at more than $1 billion, put out a statement reassuring stakeholders that the SVB crash has no impact on its business. It is worth mentioning that SVB’s investment arm led a $100 million round in Chipper in 2021. Conversely, Andela’s silence on the matter may negatively impact its reputation in the long run, as stakeholders expect companies to communicate during challenging times.
By examining how other organisations have managed similar situations, African tech startups can glean crucial PR and communication insights, such as:
- Transparency and proactivity: In a crisis, companies must acknowledge the situation and reassure stakeholders. Transparent and proactive communication fosters trust and credibility, helping to mitigate any damage to the company’s reputation. Failure to do so can, and often does, lead to both short- and long-term damage to the company’s image.
- Stakeholders are your top priority: Effective crisis communications entails addressing the concerns of all stakeholders—employees, customers, investors, and regulators—thereby maintaining their confidence and ensuring they remain informed and up to date about the steps being taken to tackle the crisis.
- Have a crisis communications plan ready: While every crisis has a unique set of circumstances and therefore requires a very specific strategic response, a thorough crisis communication plan enables startups to respond swiftly to unexpected events. This plan should go as far as delineating the roles and responsibilities of key personnel, communication channels, and critical messages to convey.
- Sustain PR efforts amid economic downturns: Crises like the SVB crash accentuate the importance of maintaining PR efforts even during difficult times. Companies that persevered with their PR initiatives during an economic downturn recover more swiftly and often experience greater growth than those that scaled back on PR.
The SVB crash offers a compelling reminder for African tech startups to prioritise crisis communications and assimilate best practices from other organisations. By doing so, they can more effectively navigate future challenges and safeguard their reputation, which is vital for their long-term success.
Regardless of the size of your organisation, in today’s 24-hour news cycle, in a climate where reputation and integrity in business is everything, transparency is a requirement and Environment, Social and Governance (ESG) continues to be of growing importance in business across sectors and regions, an effective, easy-to-mobile crisis plan is a must. If you are a growing organisation that has already secured significant investment and are on the eve of expansion, an even more detailed plan is critical, in addition to this plan being executed by a team with real tried and tested extensive experience.