A lot can change in a year! Navigating this unknown, narrow, and winding road of Highway Covid19 has been a challenge, and now there’s some easing as vaccinations help fuel the journey. Life does move on though no matter what. For entrepreneurs, there are pivotal points in time, needing disruptors, demanding innovations – and we are at such a pivotal point now as the business change process accelerates.
Currently, the Delta variant occupies our minds. We are watching data on the level of vaccine protection over time, alongside the myriad complicated factors from company, societal, and political considerations. But again, life and business do move on with new demands. This calls on entrepreneurs to respond, innovate, and set a strategy that is more adaptable than ever.
The news of opportunity is that Highway Covid19 does have curves ahead. Entrepreneurs bring the skills, products, and services to deftly steer through these curves. You may already possess the resources needed for your start-up business to succeed. In spite of the pandemic, perhaps because of the pandemic, you can start a thriving company in 2021-22. Or you can make key reconfigurations in your current company to realize advantages from the new horizons coming toward us all.
Responding to the Covid19 pandemic creates an imperative for companies to reconfigure their operations—and an opportunity for start-ups to step into the gap, in the cases where companies don’t transform quickly enough. Deloitte’s 1Q21 research highlighted the need for companies to make pivotal changes in four functional areas: technology, operations, finance and talent - and went on to explore the new opportunities on the horizon. Of course, each new endeavor will need to align their company’s focus to achieve faster success by fulfilling a market need. So contrary to popular belief, 2021-22 could be a perfect time for starting or accelerating your company. Here's why:
Growth in Consumer Online Need
Consumers (and employees, and students) are now more than ever, glued to their devices and the digital, online world. E-commerce has rocketed by nearly 40% since the pandemic started in 2020. Consumers prefer to order delivery of whatever goods or services they can. The driving forces are four-fold, all rich with demands where start-up companies can bring innovation:
1) convenience while working at home; 2) teaching children at home; 3) employee learning & retraining either by companies or self-initiated; 4) side-stepping supply chain surprises.
As companies strive to be more digital, new ideas revolve around optimizing customer models, financial and payment networks, and operational efficiencies. Rapid transformations are needed to develop and retain talent, build resilience for operations and create company cultures that are enabling. There are many more considerations as to why returning to the office shouldn’t be handled as simply opening the door, but that’s a different discussion for another time.
Available Access To Funding
2020 venture investments actually ended the year with new records in dealmaking, exit value, and fundraising as tracked by US NVCA (National Venture Capital Association). This was driven by tech-enabled industries riding the jet-stream created by pandemic-forced “un-locationing” of business, education, and healthcare. 2020 summary figures of the US VC industry present a strong foundation for what is occurring in 2021-22. Investments for 2020 US Venture Capital, per NVCA, were $156.2 billion, with $290.1 billion exited, and $73.6 billion raised by VC funds. These record figures set the stage for continued strength moving through 2021. For some funds who kept their assets “locked securely”, many are now ready to invest again to get returns on investment.
Moreover, there were fewer entrepreneurs world-wide in 1Q-2Q2021 which means less competition and more opportunity, especially for funds from angel investors. As long as you have a solid strategy in place, getting funding to back up your business may not be as hard as you think it is.
Transactions of all types continued to grow, as later-stage mega deals, large funds, and outsized IPOs continue to propel capital flows throughout the market and look for the next investment.
Many Customers Are Waiting
Prospective entrepreneurs may be hesitant to start a new business this year because they feel the customer base will have less money to spend. It’s true that the world is going through a pandemic that has impacted many individuals' and companies’ spending habits. But also remember that consumer online sales have grown 40%, with companies keeping pace. There are new, definite needs and money is there to flow to the products and services that fill the gap. Keep in mind that in any business start-up, the first year is not usually a bed of roses. You’ll still need to put in the work regardless. However, you may find it easier in 2021-22 as there are already customers who need your product or services.
In conclusion, talk to your customers and employees and friends to understand, first-hand, what need they have, for which they’d pay money for a good solution. This is a time of opportunity with problems to be solved that will bring success. Entrepreneuring is a great place to apply your talents!Author of the article: Karla Callahan