The prospect of starting a business has never seemed so daunting. The global economy went into freefall following the COVID-19 outbreak, and recovery projections (even on the positive side) set us up for a long road ahead. Social distancing remains common practice, countries have closed borders and introduced harsh quarantines, and nobody can be certain when this will all end, or if we’ll experience the dreaded “second wave.”
For many, this would seem like the absolute worst time to start a business — an economic slump during unstable times. But such is the cruel but giving way fate works, that one person’s loss is often another’s gain.
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COVID-19 isn’t just a loser’s game
Businesses have gone bust and bankruptcies declared, but in the midst of COVID-19, fortunes have also been made. The online video hosting platform Zoom saw the company’s founder, Eric Yuan, increase his net worth by 77 percent to nearly $8 billion. And Yuan is far from the only person benefiting commercially from the cultural and economic transformations seen as a result of COVID-19. British online grocery delivery company, Ocado, plans to raise £1 billion in capital to expand its operations after a record-breaking few months for the company.
Businesses around the world have seen explosive growth as they’ve been called upon to solve problems unleashed by the coronavirus.
What startups can learn from COVID-19: Successes and failures
As in any market, success in 2020 is dictated by supply and demand. Those that have won out during this crisis are those that profited off supplies that became essential, such as gym equipment for the home. On the other hand, those that lost did so because their offer became unfavorable or even unusable, such as an actual gym facility.
When we look at the market growth during COVID-19, we see some obvious patterns. Food delivery, social distancing software, online streaming services; these are all niches thriving under COVID-19.
The balance has shifted toward problem solving during a time of strife. The businesses that can provide support during COVID-19 through their products or services are the ones succeeding. But, how does this knowledge develop the catalyst for starting a business during such turbulent times?
But… can you start a business now?
The world is preparing for long-term repercussions of COVID-19, and we’re also prepared for current lifestyle changes, with new products and services introduced as a result of the pandemic likely to carry on post-pandemic. For example, it is anticipated that businesses will maintain their newfound flexible work structures after being forced to develop remote working practices to stay afloat.
So, demand will likely remain shifted toward the way we’ve been living under lockdown and social distancing, but haven’t other businesses already moved in and capitalized on this?
Well, yes and no.
Why was Zoom so popular? It’s not because it was the optimum solution. Zoom is plagued by massive security issues, and it was at the center of controversy for data breaches and acts of “Zoombombing,” in which video calls were hijacked.
It’s not the ultimate tool for what’s in demand right now, but it is a tool that can be incredibly useful. Since there were such limitations on the softwares people were looking for, Zoom demand swiftly gained momentum. While many platforms offer video conferencing, they often require logins or memberships and are built for highly commercial needs. Zoom was accessible to private individuals and small businesses, which helped it thrive.
This is the advantage new startups have on established businesses: they can be built from the ground up to problem solve for the new world we live in.
A lot of the solutions people are using right now are not designed to operate under the new normal but have been adapted to solve a particular problem. Some have done so better than others, but many more have had major issues and struggled to make the adjustment. They’ve only done so well financially because there were no other choices available.
Startups of 2020 have an opportunity to fit into the COVID landscape by being the solution that people need, rather than being their only option during a time of crisis. From tech companies to service providers, there are plenty of gaps left by the coronavirus. Start by evaluating your preferred industries for the common problems that target audience is experiencing, and then solve them.
The added caveat here is that your startup should not just be a solution to a COVID-related problem if you want to succeed long term. Plenty of organizations have started to supply PPE, but demand for this product will not be sustained. Your idea needs to be a COVID-proof business that is viable in its own right.
For example, following COVID-19, dating became difficult for many individuals. Apps and websites attempted to pivot to long-distance systems, but they weren’t really built for this concept. Startups have an opportunity to create a new platform that fits perfectly into the current socially-distanced dating scene, but that app needs to offer enough to be an attractive prospect once social distancing is no longer required.
There is no denying that COVID-19 is a global tragedy, but there is plenty of opportunity for entrepreneurs to bring creative solutions to market. Entrepreneurs, thought leaders and innovators have an opportunity to capture new opportunities that wouldn’t have been considered viable even as recently as January of this year.
In such times of strife, the following quote by American business success story, Seth Godin, rings true:
“You’re either remarkable or invisible. Make a choice.”