Coronavirus Business Impact: A Startup Disaster or a Big Opportunity to Innovate?
Today we're going to oppose two opinions about the coronavirus business impact. Some entrepreneurs think that it implies only a global business disaster, while others say that it is possible to turn the COVID-19 crisis into a big business opportunity.
Probably, not so many of us are talking about it, although the web is crowded with discussions sparkling around the novel coronavirus outbreak. How will it look like - the post-coronavirus business world? How many startups will survive the COVID-19 economic crisis? How not to give up during the global crisis? And what's most important - what are the undeniable reasons proving that the "black swan of 2020" can be not only a big business disaster but also a big opportunity? We're going to try to answer these questions here.
The Influence of The 2020 Economic Crisis on Businesses
All of us understand that it's not an easy time ahead, and we're here to cheer you up, highlighting not only the negative influences of the coronavirus outbreak but also some new opportunities that will arise for creative businesses. However, to be able to go through the best scenarios we should also be ready for all the worst ones that may play out soon. That's why we are going to consider several current negative impacts of the global issue that have already touched industries.
The decrease in business activity
Since the virus is rippling wider, companies in the USA, China, and Europe have experienced a significant drop in business activity and are at risk of missing their plans set for 2020. It may make a tangible impact on the global economy this year.
Supply chain disruptions
The unprecedented lockdown in China has caused many issues and disruptions in the supply chains of many companies. Hardware companies, as well as direct-to-consumer ventures, are suffering now from the problem of losing their main supplier. Startups that have started producing their products in China are at risk of experiencing considerable damages or disappear at all. Enterprises are actively thinking about how to find alternative suppliers.
Cancelled meetings
Many partnerships that have seemed to be certain aren't closed, many meetings are canceled due to the prohibition of flights and travels between the cities and countries. Many in-person meetings have been postponed indefinitely, and a lot of sales haven't happened. Of course, all this has been reflected in business.
Changes in fundraising
Entrepreneurs expect to see private financing decreased, at least slightly, as it happened during economic downturns in 2001 and 2009. Many angels and seed investors say that the risks are now higher and they need to put even more analysis in their investment cases. Consequently, it may cause a slight decrease in investing startups and initiatives pitched by medium-sized companies.
However, as we could see it during the global economic crisis in 2008-2009, the numbers of angel investors may not go down but remain the same or even increase. What will decrease indeed is the size of investments.
It is quite a surprising phenomenon of crisis times. It is caused by the fact that economic downturns are often characterized by appearing new customer needs, new products, new niches, and new startups that are bold enough to implement these risky yet intelligent and timely innovations. Many investors willingly fund such companies.
How to Turn The COVID-19 Crisis Into a Big Opportunity for Business?
"Many of today's unicorns have been founded or built during recessions or downturns – resource scarcity can be a source of creativity and pivoting" - Inka Vemo, Founder & Managing Partner at Voima Ventures.
The crisis is not only the time for business damages and failures. It may be the fertile period for forward-thinking companies and startups with an incredible ability to adapt to changes and inject business models and strategies with immediate innovations. It's high time for those who are ready to give up the old patterns and move forward to the new era of innovation.
Businesses that are ready to timely optimise business models, marketing, product design and development for changes in the modern market will take advantage in 2020. It's also essential to strengthen your business potential hiring the right product development company that can grab your visions and is ready to innovate too.
All the entrepreneurial masterminds may admit that it's the time of turbulence for most of the businesses ahead. However, it's also the right moment to listen to your target audience as diligently as never before because it is ready to tell you about its new needs and wants that have arisen under conditions of the economic downturn.
Your old, current, and potential customers will provide you with those incredible hints to brilliant ideas that can boost your business even during crisis times. You can try to get these insights discovering the power of social media listening with new AI-driven SMM tools or simply conduct surveys and interviews for your customers. You can also ask your sales managers to start pitches with an a-few-question survey about what is the subject of the most significant anxiety for your potential customers right now.
The skills of listening and adapting to changes are the most valuable and demanded today. They allow businesses to find out what really matters for people in the current conditions and deliver the solutions that satisfy the needs that have become of vital importance today.
The Time of Innovators Is Now and Ahead
This time is challenging for all of us. Many people and businesses suffer from the negative consequences of the virus. However, we should be ready to be highly adaptable to changes and revive our lives, our businesses, and even the whole industries. The upcoming downturn is especially threatening to those who are affected by the massive fear and panic. Let's optimise ourselves for new conditions and innovate.