Startups face great challenges, but also the consolidation of changes that can generate new opportunities.
How will startups be affected by Covid-19? Times of crisis can be scenarios in which great changes in history are forged. To give an example, the Black Death at the beginning of the fourteenth century helped to break the European feudal system.
In more recent times, the SARS pandemic of 2002-2004 had a very negative impact on the world economy, but it helped catalyze the growth of e-commerce, with the development of the hitherto small company called Alibaba. A growth driven by underlying anxiety around travel and human contact, similar to what we see today with Covid-19.
With the terrible situation caused by the spread of Covid-19, we are already seeing clear signs of a change in consumer and business behavior. Some of these changes are direct, short-term responses to crises. However, others will continue in the long term, shaping the characteristic features of companies in the coming decades.
The three dimensions of impact
Pandemics have a direct impact on the biological, psychological, and economic dimensions of the world. Its intensity varies depending on the mortality and morbidity rate of the pathogen in question, as well as the time it takes to spread.
In relation to Covid-19, the psychological impact can be observed in the population, but also in markets around the world and in the economy as a whole.
Long-term innovation and changes in trends will occur as consumers and businesses earnestly try to normalize the impact on psychological and economic dimensions, provided containment is achieved and the biological impact is resolved.
A peculiarity of this type of situation in which innovation processes are accelerated, instead of being a direct cause of it. In other words, startups that already exist can improve their position more quickly than in normal contexts. Here are some of the macro innovations that we can expect to be maintained after Covid-19 and that startups should take into account:
1. Supply chains will merge into resilient ecosystems
Global supply chains have long been geared to keep quality relatively constant while reducing costs at every step. This has resulted in significant concentration risk in terms of geographies and suppliers for most companies. However, the current crisis is highlighting that there is a great need for a more distributed, coordinated, and traceable supply of components across multiple geographies and suppliers, while maintaining economies of scale. In this model, the work of startups aimed at creating global platforms that use sophisticated technologies such as 5G, robotics, IoT, and blockchain to help link multiple buyers with multiple suppliers reliably will be a must.
2. A technological environment for the management and rise of smart cities
The outbreak of Covid-19 has forced administrations to react quickly and quickly. Proof of this is that a country like China has built a hospital in just ten days, or that South Korea conducted rapid tests of more than 200,000 of its citizens and used smartphones to tag the movement of the infected, alerting the uninfected of those movements through real-time updates. One consequence of seeing the benefits of speeding up administrative procedures is that we will probably experience a
3. (Digital) support in mental well-being
Covid-19 will be an accelerator for remote work and online education. This will have an impact on different aspects, especially those who have to work remotely indefinitely, in aspects such as morale, motivation, productivity and even mental health. Companies such as
While it is true that in the short term, the situation does not seem favorable, and startups are going to have to deal with important problems, without a doubt, in the long term, companies that know how to understand the changes that are going to take place will be the ones that achieve success. Startups in the face of Covid-19 can take advantage.
