AMID THE PANDEMIC, ENTREPRENEURS CAN STILL FIND OPPORTUNITY

The crisis provides fertile ground for startups in spaces like telehealth and touch-lessRead More >> payment. Other startups will need to get creative.  Business can be divided into two categories: those that have COVID headwinds—think restaurant suppliers whose customers are struggling to survive—and those with COVID tailwinds—think telehealth technology firms that have never seen more demand.  But that doesn’t mean that startups with headwinds are doomed. Instead, entrepreneurs must harness the innovative spirit that drives them and adjust to the moment.  Overall, fewer businesses are started during recessions. And the ones that are start smaller than those formed during boom years.  The good news, however, is that recession-born businesses tend to be more productive, as measured by revenue per employee. And startups during a recession tend to be grouped into industries that rely heavily on innovation.  In the last financial crisis of 2008, society’s growing distrust of financial institutions led to startups like Venmo and Square.  Today, people should expect to see innovations in a wide range of industries. For example, healthcare innovations will likely address both drug development and telehealth delivery. There will likely be new types of automation in manufacturing to allow for social distancing between employees. And, for supply chains, she anticipates more real-time monitoring, so companies can manage customer expectations in the event of disruptions.  Investors are approaching startups and saying, ’I know you’re not planning on raising for 12 months, but I want to preempt that round.’  What they’re really saying is, ‘I have FOMO. I have fear of missing out. I want to get my money into your company because it’s going to grow so fast and I want to get it in now. I’m willing to take the additional risk because I see the future.’  

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s