The future of startups after COVID-19
It is quite evident that the shifting sands triggered by the COVID-19 pandemic will reset everything as we once knew it and push businesses to learn how to tackle the unknown in a crisis. The pandemic has brought with it opportunities as well as threats for startups.
Startups that understand the new definition of ‘normal’ will try to bring out the best in themselves by grabbing new opportunities and identifying new customers.
Pivoting is vital to startups
It is critical for startups to adapt their offering rapidly to meet the evolving demands of the altered marketplace. The time has come to pivot—to change the business strategy without tinkering with its foundation.
Sensing new opportunities in the midst of the disruption triggered by a crisis is the way forward for most startups.
For example, Delhivery, a leading e-commerce logistics player that was into institutional deliveries before the pandemic, made the seamless transition to becoming a hyperlocal delivery player post the first lockdown in India.
Improving global trends
Globalization was already a rapidly evolving trend before the pandemic struck, and it seems like it’s even more so right now. Many companies have started to wise up to the fact that they can benefit significantly from tightly cooperating with others, and the increased quality of communication options has played a lot into improving the situation for everyone.
Every company needs to put an effort into adapting to if they want to prevail in the current market.
More prepared for the future
Many businesses have realized that they were not entirely properly equipped to handle the situation. As a result, many companies – especially startups – have started to put effort into preparing themselves for what’s coming up ahead and laying down the foundations for a more stable infrastructure to support such situations.
Businesses must discover sustainable ways to minimize their costs without impacting any other area of their operations. Startups have to start paying active attention to what’s going on with their costs and put active effort into optimizing them.
Startups are generally funded privately, usually by wealthy investors, known as angel investors. But even wealthy investors are impacted by declines in equity markets and increased financial market risks.
So, with the recent drop in the stock market and economic uncertainty post-pandemic, private funding is likely to slow for many investments. That could be a problem for startups that try to grow fast.
Impacts and expectations
For at least the next year or so, startups are likely to have a very tougher time raising funds — especially if they run with big losses and have little or no cash flow. This could kill countless startups and cut down entire startup ecosystems.
Although the COVID-19 outbreak is, and will continue to be, a significant challenge for the start-up ecosystem, the current crisis may also create short-run and long-run opportunities. It will be the perfect opportunity for businesses- big and small to reassess their core capabilities and focus on innovation-led growth.
Startup pivots during COVID-19 should be approached as an evolution in the business strategy that will help the company not just to survive the crisis but also thrive beyond it.