Every day because of COVID-19, some companies are going under and some are going up. In these hard times, e-commerce websites, supermarkets and those who provide essential things for humans have survived and gained a lot of money. The companies that we thought would never go under such as big airlines or car companies have faced with the danger of going bankrupt. A lot of things has happened. But, there are companies and people who have come out stronger from these hard times. One of these is startups. They became stronger, had more on their hand and gained more.
How did they achieve this? How are startups becoming stronger? Don’t they still have the danger of going bankrupt? Startups becoming stronger means that corporates will have to suffer? Let’s dive into the frequently asked questions and let the startup mechanism show us the way to the light, end of the road.
Everything is just beginning for startups
Along with the fight over coronavirus, some startups have gone down, there is no need to hide that, but that was because they needed time to adjust to the market before coronavirus, most of them required huge amounts of money to survive because what they were doing or producing was intense and required hard-work. They couldn’t hold onto that environment without investors. But, more than half of the startups have survived and become stronger.
The first reason for that is because most of the expenses for offices, travel and many more that needs huge spending of monthly expenses have gone. There were just the wages of employees, mostly. In an environment like that, they managed to transfer that money to R&D or marketing and become stronger in what they do. This is something that we can’t just oversee.
The second reason is that since most of the startups have fueled with energy from young people, it was relatively easy to switch to remote working because nearly everyone was ready to work from home and knew how to use the technology as opposed to elderly who are not familiar with this tech and that was a huge plus for both sides. Employees were able to give more and employers were able to take more and focus on other things. Made things easy without a second thought.
“People today really value workplace flexibility and remote work because it allows them to focus their energies on work and life as opposed to commuting or other complications due to geography.”
— Ken Matos, Vice President of Research, Life Meets Work
Another reason for this is that because of all these opportunities, startups were finally able to do what they want without worrying too much about finances because they only have to pay for what they want apart from fixed costs (which got smaller thanks to no office) and employee wages. They were able to get into the market easily, get in touch with people overseas thanks to Zoom and other kinds of easy things that weren’t available before the pandemic.
When we compare the pros and cons of lockdown for startups, pros are way heavier than cons. Cons were that there was lack of investment from investors and startups are not used to work without investments but, as I said, since fixed costs were very low, it was easier to manage the money they got from investors before the pandemic. So, it was the same thing IF your startup wasn’t something that required huge amounts of cash to produce something. But, startups becoming stronger might mean that corporate has a chance to suffer in the future. Because, even though they have cut on fixed costs, their services or product creation requires huge amounts of money and if they can’t sell anything, the chance for them to stand up is low and going low every single day.
To conclude, it is safe to say that for the majority of startups, lockdown measurements for coronavirus hasn’t really affected them but even made startups stronger because they were able to do what exactly they wanted from internet, startups’ CEOs were able to get in touch with people from overseas with a simple click, they were able to spend the extra money they didn’t spend to office expenses to marketing or R&D for their market or their product or services. If you are reading this and you are thinking about creating a startup, you are even too late. You have a lot of chance to bring experienced people aboard easily and cost-free. Take your share when startups are becoming stronger every day.
“We like to give people the freedom to work where they want, safe in the knowledge that they have the drive and expertise to perform excellently, whether they [are] at their desk or in their kitchen. Yours truly has never worked out of an office, and never will.”
— Richard Branson, Founder and Chairman of Virgin