Amid the doom and gloom of the coronavirus pandemic, a startup boom sparks a ray of light. This global crisis has created new global industries. If you’re daring enough to take a risk, you may find a wealth of opportunity on the horizon!
But first, let’s go on a quick rundown of how the pandemic impacted economies around the world. Then, let’s see how it cracked open new opportunities for various startups. More importantly, we will discuss what you should do in light of these developments.
Many people believe the COVID-19 pandemic will bring about a so-called “new normal.” It is up to you what that term would mean for your life. For many people, it’s the right time for their startup boom, and perhaps yours too.
How did COVID change the global economy?
The pandemic forced millions of people into a series of unfortunate circumstances. First, there’s the threat of a virus that continues to spread. In response, countries took drastic measures.
They had to enforce strict lockdown measures, and this meant most people confined themselves indoors. At the time of writing, we still had to wear masks and keep our distance from others.
This cascaded further problems for businesses. The public health guidelines prevented customers from visiting them. As a result, we saw many companies close down.
This caused massive layoffs worldwide. With barely any money left, poverty grew significantly, and more people lost their homes. Also, we’ve seen the effects in our supply chains.
The UK gas shortage is a recent example, and the pandemic caused various factors that limit the country’s supply. After reading all this, you may think there’s no silver lining in sight.
Yet, there is. Many people saw these events and proceeded with starting businesses. Thus, we now see a startup boom igniting across the globe.
Why did more people proceed with their startups?
A study from a University of Maryland economist may shed some light on this unusual phenomenon. John Haltiwanger said, “We’re now convinced this wasn’t just a blip.”
He first noted the United States Census Bureau’s recent statistics. It recorded more than six million more business applications since the pandemic started.
Then, there are the digital trends during the pandemic, such as online retailers. Remote workers flocked to the suburbs, turning them into “Zoom Towns.” This was great for local revenue.
He went on to say the startup boom could go in two directions. First, it could be temporary, and once the economy reopens, demand will return to brick-and-mortar businesses.
On the other hand, it may be the start of a new age of business. Countries will adopt better technology, and they won’t be coming back. In turn, the startup boom’s effects are here to stay.
Early data show a significant divergence in startup activity across advanced countries in the first 3 quarters of 2020.
On new business formation during the pandemic: https://t.co/qTWgF5gRHt pic.twitter.com/p7WaacF8NA
— Peterson Institute (@PIIE) February 17, 2021
Long-standing concepts may also explain this unusual surge of business formation. It’s called “creative destruction.” Economist Joseph Schumpeter coined it in 1942.
He claimed it was an “essential fact about capitalism.” It refers to new companies replacing old ones, which eliminates ideas and businesses that do not fit the current times.
Then, the economy allows innovation and creativity by helping startups grow, which drives progress and eventually produces more revenue and opportunities.
What are the winning sectors in this startup boom?
It’s no surprise that the post-COVID world will become more tech-driven. After all, the latest trends involved cryptocurrency, remote work, and increased app usage.
This doesn’t show the other startup worlds that are thriving in these times. That’s why we listed some of them below. Read for more details:
- Online learning – Students took up online courses to continue learning while avoiding the virus. In response, we see more EdTech startups like MyTutor and Kids Science.
- Health and wellness – People find it hard to consult a doctor during the pandemic, and some need it for physical and mental health issues. That’s why more people use telehealth services nowadays.
- ‘Managed’ office spaces – People still wanted to hang around with other people. Meanwhile, they want to keep their work-at-home role. That’s why coworking spaces are popular nowadays, and it lets employees work and meet anywhere they like.
- Delivery services – People needed to buy things without going outside. That’s why more people use delivery apps right now. A lot more people use super apps too!
How should you respond to the startup boom?
All of us can expect great things from this worldwide event! It will bring us new products and services, and some of the existing ones may improve.
You could watch the startup boom from a distance. If you can, why not join the people making the sparks fly?! Believe it or not, this is a good time to start a business because:
- The world needs more startups that can quickly meet its ever-changing demands.
- It’s a lot easier to get money for your startup via business loans.
- You may easily fill your startup with talented remote workers.
- You’ll have less competition once the pandemic ends.
How do you begin? We’ll show you the basics below. Note that starting a business isn’t cut-and-dried.
You’ll have to make adjustments, especially during these times:
- Have a business idea – Look for things that people want or need right now. Then, see how you can fill in that demand. Prepare several options, then narrow them down based on what you can provide. For example, you can’t follow your delivery app idea if you lack money and skills.
- Test your idea – You need to perform market research to determine your target audience. Then, you should see what your competitors are doing, and both can give a clear picture of your intended market.
- Write a business plan – This document tells about your business goals and how you’ll strive towards them. It will guide how you will run your business. On the other hand, it will inform investors how you’ll earn money in the long term.
- Estimate startup costs – You’ll need money to start your business. As we said, it’s easier to get funding because of the pandemic. However, take care when borrowing funds, and make sure you’re willing to shoulder and repay the debt.
- Market your business – If people can’t see your business on the internet, it’s not on their radar. That’s why you need to use various digital marketing methods like social media and email. Fortunately, the right agency can help you do it properly. Click here to learn how LeadAdvisors can help your startup boom!
- Launch your business – Make that startup boom by making its first day a special occasion. For example, brick-and-mortar establishments may hold a ribbon-cutting event, and you may also add promos to attract more customers on your first day. Marketing is also important for this part.
The startup boom is just one of the major changes from these uncertain times. There are so many things happening that you don’t notice! Still, you need to stay up-to-date.
You’ll need to make sense of the world to make ways toward your goals. This is especially true if you have a business. Learning the trends will give you an edge over the competition!
Fortunately, the internet has a lot of free updates about all these trends. Even better, you don’t have to search online randomly. You can find these updates from other Inquirer USA articles!
Learn more about the startup boom
Why are startups booming?
The startup boom happened because it became easier to start a business. Interest rates for business loans went down, so you can get them easier. Also, the pandemic opened a lot of fresh new trends. Startups are well-positioned to meet these demands.
What type of startup is most successful?
The most successful startups involve smartphone apps and e-commerce. People spend more time with their phones because of quarantine. Also, apps let companies meet their customer’s needs quickly. Since brick-and-mortar alternatives are closed, consumer spending goes to them instead.
Should I have my startup?
You will have to figure out on your own if you should start a business. Ask yourself if you can handle the risks and costs. After that, you should have an exact product or service that can serve people. If you have these, then it might be a good idea to have your first startup.