Crisis is an opportunity for innovation. How can your business make the best of this situation and come out stronger than ever?
As the economy rapidly slows down, countless businesses around the world are on the verge of collapse. With the fear of failure overruling the necessity of change, many businesses are choosing to do nothing rather than take risks on new opportunities.
But in a crisis, the environment is dynamic. With shifts occurring quickly and dramatically, the real risk is doing nothing.
A crisis opens doorways to both new and old products that might not have been good fits in their market sectors before. Consider what's happening in online learning and entertainment, grocery delivery, and on-demand services. The world is changing, and this means tremendous opportunities will arise.
Here are some good reasons for entrepreneurs to take more risks these days and embrace the opportunity to innovate.
1. Limitations imposed by quarantine are changing consumer behavior and introducing opportunities for new startups.
Many successful companies were born in times of change and disruption. When nothing happens and life is calm, "everything has been done before" is the motto. Disruption from the coronavirus brought rapid changes in consumer buying behaviors, introducing new opportunities for entrepreneurs. As a CEO and founder of a technology company, I already see increased demand from startups looking for new ways to embrace the change and adapt their products to a new normal.
- Quarantine or no, students have to study. With distance learning becoming a necessity, startups offering tools for video lectures and online learning are likely to forever disrupt the business model of education for the better.
- Startups and enterprises alike have shifted to remote work and need technologies to support new collaboration methods. Internal chat application Slack added 7,000 new users between Feb. 1 and March 18 (its entire preceding quarter only brought in 5,000 users). Video conferencing software Zoom keeps breaking its download records with millions of new users every day, compared with tens of thousands before the crisis.
- With going to a store becoming a dangerous endeavor, delivery businesses are set to flourish, changing the habits of even the most old-school consumers. Uber Eats has launched its food delivery service for businesses so that companies can support their employees who have to stay in isolation with limited access to food sources.
- As millions of people isolate at home and lose their jobs, mental health support is a growing healthcare need. This opens up opportunities for startups and companies in the telehealth industry that can provide remote mental health support to those in need.
- The increase in unemployment rates increased demand for job portals and marketplaces such as Upwork. While Upwork's main audience is freelance developers and designers, there are plenty of opportunities for marketplaces in other professional domains that don't have their own version of Upwork yet, such as the event, healthcare, legal, manufacturing and travel industries.
- With outdoor sports banned and gyms closed, people are spending more time exercising at home and developing new consumer behaviors around it. After the quarantine, many of us will be used to sport activities at home, which means increased demand for home fitness products and apps.
2. Governments are providing emergency financial support for small businesses.
The governments of several countries have already announced multiple financial measures to help businesses navigate the coronavirus crisis. The assistance aims to support both established and emerging businesses, including financial support for new research and development (R&D) activities. These measures are constantly being updated, so businesses should monitor the situation in their countries and states.
- The U.S. government is offering financial support such as the CARES Act and low-interest loans through the Small Business Admininstration. The SBA can also help businesses craft action plans specific to their situation. Though the Paycheck Protection Program is already out of funding, many businesses are hopeful that the Senate will approve additional funding for the program.
- The government of Israel will grant Israeli companies an initial amount of approximately $13 million for the R&D and demos of systems, products, or technological solutions designed to mitigate the challenges of the coronavirus crisis. The program is expected to cover 50% to 75% of the expenditures.
- U.K. small businesses will be able to access cash grants of up to £25,000 in addition to other supporting measures, such as rate relief, tax reliefs, loans and grants. Businesses developing tools and services to help critical industries during the pandemic might be eligible for a grant of up to £50,000 ($62,360). This includes solutions for online education, online communication, home entertainment, healthcare, financial services, retail, transportation and general wellness.
- China's local measures include reducing rent, waiving administrative fees, and refunding unemployment insurance premiums for small and midsize businesses. Additionally, the Beijing government is providing a subsidy of up to RMB 200,000 (around $28,700) in R&D costs for some small and micro enterprises in the science and technology sector.
3. A crisis shifts the attention to one problem that really matters.
Many offline businesses have been undergoing digital transformations over the past few years. However, the desire to avoid rapid internal changes and ensure stable delivery of their existing products was shifting organizations' priorities away from accelerated transformation.
Today, businesses that couldn't make the digital transformation in times of peace, such as purely offline retailers not ready to support consumers' shift toward online shopping, are hardly able to withstand the sudden war of technologies.
The only way to stay afloat now is to prioritize full-scale transformation initiatives, which must become clearer with the crisis, and focus on the one thing that really matters. This could be one of the following initiatives, to name just a few examples:
- Launch a startup within your enterprise that can allow you to meet changing demands faster without sacrificing the integrity of the core business.
- Enhance your digital capabilities and distribution channels to support online sales, such as by developing e-commerce functionality or a consumer mobile app to speed up the purchase process.
- Utilize advances in technology, such as big data or the internet of things, to maintain a competitive advantage and be ready to return to the market at a higher speed. In times of economic growth, it is fairly hard to justify the investment in legacy infrastructure and R&D, as funds could be efficiently allocated to top-line growth instead. When the market is slow, like today, is perhaps the best time to rethink the way you organize your business's digital activities.
The next few months will usher in dramatic changes in consumer buying behavior, introducing opportunities for nonlinear growth and the expansion of products and services. It is important not to waste this time of crisis, as many great companies and ideas have emerged from recessions stronger than ever.
2020 is going to push entrepreneurs to their limits. Yet, for those ready to embrace the change, 2020 may be an opportunity to learn new ways of doing business that could transform their companies forever.