The pandemic has been a tough time for everyone. But out of adversity comes opportunity, this is very true for entrepreneurs. The numbers have spoken, let’s take a look at some key startup business trends during the pandemic.
Just like Charles Darwin said, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.” The COVID-19 pandemic has forced businesses of all shapes and sizes to adapt at all costs in order to survive.
When the coronavirus pandemic conditions first hit in early 2020, businesses scrambled to keep their doors open. Many had to lay off staff, reduce inventory, and change the way they operated.
For startups, this meant pivoting their business model, product, or both to meet the new demands faced by consumers under lockdown.
Some startups managed to not just survive but thrive in this new era. They quickly learned to sell everything from hand sanitizer and face masks to home office furniture and software that facilitates remote work. These are the success stories.
According to the U.S. Chamber of Commerce, “Over 4.3 million new business applications were filed in 2020, an increase of 24% over 2019. During 2020, about 380 out of every 100,000 adults became new entrepreneurs each month.”
The bottom line is that the pandemic has created unprecedented opportunities for those who are willing to take advantage of it. So, what is in and what is out during this pandemic?
Choosing the Right Industry
Some industries have been hit harder than others by the pandemic. For example, the travel and tourism industry has been decimated. While global tourism had its worst year ever, e-commerce has exploded in popularity.
So which entrepreneurs are doing well during the pandemic? It’s not hard to guess.
As mentioned, the e-commerce industry is booming. This is due to the fact that people are stuck at home and are turning to online shopping in a big way to meet their needs.
Another industry that is doing well during the pandemic is healthcare. The fact that there is a global pandemic has led to an increase in demand for healthcare products and services.
The telecommunications industry has been another winner. People are using telecommunications products and services to stay connected with loved ones, work remotely, and access entertainment.
The e-learning industry is also doing well. With schools and universities closed, people are turning to online courses to continue their education and gain new skills.
- Tech Startups
The pandemic has also been good for tech startups. This is because people rely on technology more than ever for entertainment and everyday tasks like studying, working, communicating, shopping, and even banking.
- Delivery and Home Services
Another industry that has seen a boom during the pandemic is delivery and home services. Once again, with people still reluctant to leave their homes, they rely on delivery and home services to meet their needs.
Providing Solutions, Not Products for Customer Retention
In the past, businesses have focused on selling products. However, during the pandemic, successful companies have switched their focus to providing solutions.
When you think about it, the pandemic has created a big, fat problem (or set of problems) for everyone. People are looking for ways to solve these problems and return to some semblance of normalcy.
So the pandemic has been a great wake-up call to take care of a customer’s needs and not just sell them products. Successful entrepreneurs grasped that this brave, new world of commerce involves creating solutions that allow them to gain a long-term market, rather than just make a quick buck.
One thing has stayed the same, though. Don’t waste time developing products and services for which there exists no market. And having initials like PhD or MBA after your name doesn’t guarantee a person truly understands the market.
If that sounds like a bit of old-fashioned business knowledge, it is. While business environments come and go, and sometimes are even transformatively changed by something like a pandemic, the basics remain the same. For example, do you know how to keep a customer? It costs even times more to find a new customer than hang onto one you already have. That’s true whether it’s 1520, 2020, or 2520.
It’s all about brand loyalty. It used to apply to corporations like IBM, and Coca-Cola. Now it is applied to Zoom, Uber, and others. The point is this. Know the trend but understand human nature because that’s where the profit lies.
Embracing Remote Operation
A McKinsey & Company article called the remote work transformation a once-in-a-generation kind of an opportunity to reimagine the workplace. It compares it to the Industrial Revolution in the 1800s and the arrival of computers which paved the way for the dot-com boom in the late 1990s.
Many startups have been founded on the basis of remote operations, and the pandemic has only accelerated this trend. These businesses conduct their operations entirely remotely and use technology to stay connected with employees and customers.
While some businesses have been able to make the transition to remote operation seamlessly, others have struggled. The key to success seems to be having the wisdom to choose the right tools and platforms and then provide employees with the training they need to use them successfully.
Accelerating Digital Transformation
The pandemic has created an acceleration in digital transformation as businesses turn to technology to help them meet the challenges posed by the pandemic.
Technology has made businesses rich even in the lockdown. According to The New York Times, “The five tech superpowers — Amazon, Apple, Google, Microsoft, and Facebook (now Meta) — had combined revenue of more than $1.2 trillion,” during the pandemic.
This is the reason why startups that focus on digital transformation are seeing unprecedented growth. Though the tech giants have led the way, smaller companies see an opportunity to replicate that success on a smaller scale thanks to the fact that digital transformation has leveled the playing field to at least some extent.
This next point is a big deal. Investors are also more interested in startups that focus on digital transformation. That’s ‘nuff said about that.
What Is Next for Startups?
Like every other point in human history, no one knows exactly what the future holds. One thing is certain, however. The pandemic has accelerated business and societal trends that were already in motion.
The “new normal” has changed the way businesses operate and the way people live. And it is here to stay and evolve.
Startups that have been able to adapt and pivot during the pandemic are in a better position to weather the storm. But, even if there is a high success rate for startups during the pandemic, the real challenge is to maintain that success.
They’ve shown they can survive and thrive in a pandemic, but the next test will be the post-pandemic world. Is your business ready to stay ahead of that curve?