The COVID-19 pandemic has left very few people if any, unaffected. Governments around the world have been pushed to their limits and businesses have taken a lot of beating. Many small businesses and startups are in the red zone of financing their operations.
Since the onset and spread of COVID-19, about three out of four startups (74%) have had to terminate full-time employees. This health crisis has really pushed a lot of organizations to their limits. Despite this, however, many companies and individuals have rallied to adapt, respond, and where possible, tackle the crisis.
Tighter belts and falling fundings
Funding for startups and most small businesses have undergone dramatic changes. The volume of funding rounds for the fintech sector, for example, has dropped 45% compared to Q4 2019, and 25% compared to the same period last year. It is on its way to its lowest levels since 2017.
Companies will have to tighten their belts and focus more on profitability and positive cash flow — that is, find ways to stay afloat first before even thinking about growth.
This concern about funding is forcing many startups to rethink their strategies and to look at more robust business ventures. Innovative projects still in the pipeline and have no demonstrated profitability (or those in the exploratory phase) are being set aside for the moment. Uber, for example, has temporarily shelved its flying taxis project to pool resources for their core business.
Agility and adaptability are key
Other startups and small businesses have found a way to continue on through some kind of “repurposing” — redirecting their existing knowledge base, skills, team, and networks to handle new and emerging needs.
Some startups have repurposed their operations to help their local communities in things like producing and selling face masks, and even turning local transport startups into grocery delivery services.
Custom software development for startups also proves to be of great assistance here, as the service has helped many organizations adapt, scale, and survive in these trying times. This repurposing may be a Band-Aid solution for now, but with the right systems and strategies — and if businesses are agile enough — they can easily turn it into a profitable, long-term endeavour.
Providing solutions for new, emerging needs
Innovations has been the name of the game in the past few months. Because of the need for social distancing and focusing on the safety of employees in the workplace, many startups and small businesses have turned to ‘work from home’ options; startup events and summits have become webinars. Even tech giant Google has announced recently it will extend the WFH option for all its employees across the world through summer 2021.
Whenever a new need emerged, startups and small businesses were the first to adapt and address it.
People with medical concerns but cannot go out of their homes have turned to telemedicine; schools and educational centers have switched to online learning; supermarkets and food supplies with an abundance of stock have partnered with food processing and delivery service providers; retail businesses have been pushed to embrace e-commerce; and even the handling of the pandemic has turned to technology with IT solutions for contract tracing, patient data analysis, and predictions.
With the right solutions and support team, many startups have been able to address specific activities that have pressing demands or needs.
Hacking the Pandemic
DevsData has talked about how big data is being leveraged in the pharmaceutical industry, with the help of the right software solutions. Startups have also tapped into this by attacking the pandemic from several angles.
Canada-based biotechnology company Cyclica has been doing their part in fighting the novel coronavirus by taking a different route. Rather than focusing on vaccine development that could take years, they are using their tech and AI platforms to identify drugs (that are already approved by the FDA) that have the ability to unlock proteins that could be effective against COVID-19. The endeavor seems promising as it was able to raise $23 million in a Series B round just this June.
In Berlin, cleantech startup SunCrafter was able to win Estonia’s ‘Hack the Crisis’ online hackathon aimed at tackling the pandemic. At the hackathon, the startup was able to come up with a hand washing solution that uses ultraviolet light for disinfection, using end-of-life photovoltaic modules. The company’s normal operations is in developing off-grid solar generators from upcycled solar panels.
Over at Estonia, tech startup eeBot also took part in the hackathon and was able to create a live chatbot to answer all questions about the pandemic. The chatbot, named Suve, is designed to reduce the demand for healthcare providers by giving Estonians access to information about the disease and the government’s handling of it. A few weeks after the hackathon (and after a few tweaks), the government has officially adopted the chatbot service and is now available for the locals.
Other startups have also stepped up in different aspects, including one that is working on an AI-powered COVID-19 diagnosis tool that only uses a person’s voice; a company offering financing for SMEs experiencing cash flow issues due to the pandemic; a startup with a digital queuing technology that has been repurposed to help reduce virus transmission in enclosed spaces; and more.
The ‘New Normal’ for businesses
The New Normal is what awaits the world after all of us comes out of the other side of the COVID-19 pandemic.
As with any challenge, the health crisis has forced businesses to innovate, and startups were not to be left behind. The world is facing an unprecedented challenge, and it is up to our solidarity, creativity, and ingenuity to come up with solutions (be it tech or otherwise) that will help us get out of this crisis as best and fast as we can.