I was speaking to a friend in Silicon Valley at the peak of the lockdowns. He is a well-respected investor, with many successful companies in his portfolio that have gone on to attain unicorn status. In the course of our conversation, he said something that set me thinking. “It is quite likely that the next start-up to hit big time may actually emerge from some kind of new behaviour that has emerged in the pandemic … something that either didn’t exist earlier, or surfaced only during the months of confinement at home”. He was actually right. No crisis should ever go wasted.
This Covid-19 (or so C-19 as it is now conveniently abbreviated) pandemic has played havoc with our world, destroyed the ‘normal’ we were so habituated to, and redefined the contours of how we work, study, communicate, eat, relax, entertain, pray … even pay. The goalposts have moved in every part of our lives, and our existence. So also, in the business of business. Especially, the world of startups which is as it is faced with much uncertainty and myriad challenges.
What are the significant trends for the future in the startup world?
- Innovation will decide whether you prosper or perish: Necessity they say is the mother of invention. And this is where good entrepreneurship can convert an adversarial situation into an opportunity, plugging a need gap that may have existed for long, but wasn’t perhaps as visible. A localized taxi start-up suddenly found itself grounded as the lockdown shut everyone at home. They could have despaired, even died. But the founders pivoted their business to a home-delivery service which had ready takers in the lockdowns due to the constraints and controls on movement. That is innovation. And quick thinking. An important trend that will fuel start-ups going forward.
- Agility in responding to changing landscapes: A young start-up of architects specializing in retail design that launched last year on Christmas suddenly found all malls shuttered and all retail at a standstill during the lockdowns. Rather than fret and fume over the sad state of affairs, the promoters just pivoted the business to make DIY furniture best suited to WFH … foldable tables, study desks and even dismantlable chairs for better comfort during full day meetings. The new line is even more lucrative than the original start-up.
- Selling direct to consumers for better brand recognition and more value: The pandemic has fast forwarded the world by one, maybe two, decades. One of the positive trends of the past few months has been the rapid digitalization of the distribution of various products. With e-commerce listings to e-payments to e-deliveries, start-ups can now reach their customers far more effectively, efficiently and economically.
- Online is imperative: The most humble of businesses today needs a digital imprint. The proliferation of devices, the ubiquity of the internet and the cheap availability of data has put the power of digital connect in the hands of the poorest of poor, and that too in the remotest corners of the globe. This has meant that start-ups can dream to reach almost every human on earth. Today, therefore, the means are there; the rest is hard work.
- Harnessing talent across geographies and decentralized teams: One of the most cataclysmic changes that has taken place in the past months is ‘work from home’. In fact, ‘work from home’ has over the months enlarged itself to ‘work from anywhere’. So talent from small towns can go back to where they belong, and yet pursue a job with a global organization thousands of miles away. Business continuity processes are also today being designed keeping in mind that bigger metros have been more affected far more by the virus than far away small towns. So suddenly, it is more prudent to decentralize teams and spread the risk of business. Start-ups will do that in the future, for sure.
- Startups will gain from collaboration: Today, every function of technology is becoming highly specialized. The day is not far when every enterprise will need to excel in that micro domain that it works best in; and an agglomeration of these super specialists will coalesce to create the mega opportunity of tomorrow.
- The Big Idea is the start-up itself: In the past companies were born to create products that would be The Big Idea. For Airbnb or Uber or even WeWork, the very enterprise is the Big Idea. Every moving sub part of such organizations supports the core promise of what the company stands for. The company is the product. This will become more and more true in the future.
- Experiences will prevail: One of the profound lessons of the past few months has been that experiences will prevail over materialism. More and more people will vote to be happy, rather than be rich. Many more would prefer to nestle in nature, than thrive in concrete jungles. Business enterprises that will help more and more people to connect with their inner selves will find ready buyers. The permanence, the stability and the certainty that older generations sought as ‘security’ will have very little value in the future. The consumer of tomorrow will be driven more by fulfillment than by success. Businesses will have to orient themselves to this new awakening.
No one really knows what tomorrow holds. But there are patterns that indicate what tomorrow might possibly look like. For businesses that are young and nascent, the consumer of tomorrow will be more inward looking, more conscious of what his heart wants than what his brain desires. Startups that orient themselves to satiate and satisfy this ‘new’ consumer will succeed, they will surge and they will soar.
(Dr. Sandeep Goyal is the author of the recently released book, ‘Future Shock’.)
Read excerpts from the book here: Predicting the Post Pandemic World.