How COVID-19 Has Affected Startup Sector
Startups are fragile. For their businesses are not yet validated for scale. Their ecosystems are constantly changing. And they have limited money and time at their disposal. So imagine their plight when a pandemic (such as the Covid19) occurs, causing them to rethink and re-evaluate their basic assumptions. But startups have one advantage, they are quick to adapt, ready for shocks and therefore resilient.
When Covid 19 hit our respective regions, I’m sure none of us was really prepared. And we had to literally go back to the drawing board and rethink our businesses. The earliest reactions were to cut costs, but as the Pandemic played out, many startups were quick to realize that consumer demand had not stopped, but the nature of it had changed, driven by the most basic of all human emotions – fear. And as Start-ups, we were quick to respond. Food delivery platforms pivoted and started delivery of essential goods. All clothing manufactures started making masks and PPEs that were the need of the hour. Healthcare startups worked on indigenous testing kits. And beauty websites focused on grooming items under essential products.
There were, of course, some that were wildly successful – termed as the Black Swan – who saw the Pandemic as a God send meant to rapidly changing consumer behaviour to their advantage. The technology platforms – Zoom, Hangouts, Teams, Meet and so many others that were the only solution for millions of companies attempting the 'work from home' format for the first time. Events industry too, with webinars, Insta and Facebook lives becoming the new normal. Classrooms being replaced by digital forums to impart knowledge from the comfort of one's home. Print being replaced by digital magazines, Travel being replaced by virtual tours. Digital revolution came only too suddenly.
Needless to say, all industries are under immediate pressure. With borders sealing up, travel is at a grinding halt. Jobs and incomes are under threat, and derivative industries like auto, consumer and retail are suffering. Still, there is a ray of hope, ironically from data in the country of origination – China. For the nation has seen a huge spurt of domestic demand fuelled by the lockdown. Ctrip – China’s largest OTA reports domestic leisure industry occupancy at an all-time record of 90%. LVMH sees soaring stock prices on account of a spike in luxury goods demand post lockdown. And even car sales are showing a slow albeit steady recovery.
While it may be too soon to pop open the champagne, there are clear trends emerging for startups to help them in a post COVID world.
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