While COVID-19 started a financial downturn and a wave of challenges for people and businesses, it also made many social and economic problems obvious. The industries that remained ignorant to urgent rethinking, innovation and digitization before, appeared to be unready to address consumer needs in the current environment. Business sectors soaked with traditionalism are now experiencing a challenging transition to a new digital economy.
Even in challenging times, there is a place for reimagining possible.
Some technology entrepreneurs seized this time as a good opportunity to start businesses that can speed up the shift of industries to more innovative and sustainable thinking. They look to find solutions to consumer problems that are emerging today and those existing before but amplified by the pandemic.
Today, companies that hardly adopt innovations are outperformed by new startups that ride out these changes with flexibility and empathy to consumers. However, it also doesn't come easily for them. Starting a business during the coronavirus crisis is a challenge that requires a great strategy, adaptivity to the fast-changing market, and commitment to constant reinvention.
The path to the better has never been easy.
Businesses should prepare for it well. In this article, we share our vision of how startups can get off the ground in the turbulent times.
Think of What Consumers Need Right Now
Consumer habits have significantly changed amid the pandemic. Explore the new market demand to figure out whether your innovation addresses a real consumer problem. Find a gap in the market and fill it with your innovation. Be sure it matches the consumers’ new lifestyle. A perfect product-market-fit is determined by the product’s ability to meet the actual market demand.
Pursue a Dual Mission: Social Impact and Financial Growth
Building a viable business requires teams to consider social tendencies affecting their consumers. It helps them understand “the air” that their audience breathes, the problems they experience, and the overall mood penetrating their daily life. Finally, it enables them to build a really consumer-oriented strategy.
According to McKinsey’s recent study, normal purchasing behavior has been undermined during the COVID-19. Today, consumers tend to make purchases based on trust and value regardless of their price sensitivity. They prefer brands with a social mission behind the product. People feel more loyal to those who care about global welfare and everyone's good.
The world is now oriented at building value and a sustainable future more than before, and companies should support and contribute to this powerful stream. Social impact and financial growth are becoming equally important in the post-COVID market. We see the rise of social enterprises with business models that aim to achieve these parallel goals.
Create a Recession-Proof Business Model
The business landscape is now rapidly changing. It’s greatly affected by pandemic restrictions, new consumer needs, remote work, economic downturn and many other factors. What we used to see in the market a month ago isn’t a reality today. In such a volatile market, it’s vital to develop a recession-proof business model with good financial planning in place to ensure that a startup will be able to weather any storm.
Many experts recommend diversifying every element of your business. The more diverse team you build the more creative ideas you can generate together. This approach allows startups to bring different perspectives to the table and get a more comprehensive business vision. Also, you can expand the offering to serve a greater diversity of consumers and industries.
A recession-proof business model involves inventing new sales and marketing models, seeking alternative revenue streams and trying various customer acquisition models to build resilience in unstable market conditions.
Develop a Great Marketing Strategy
Since COVID-19 hit our lives, digital marketing has significantly changed. Many practices that performed well before have lost their sense today. Marketing acquires a different shape. It becomes more transparent to consumers, visually impactful and “socially conscious.” Now, brands should care about not only how to market their products/services but also how to deliver value and support to people.
In times of social distancing and uncertainty, consumers want to gather into online communities around brands and share their experiences with like-minders. Community marketing is on the rise. A “human touch” and empathy matter more than ever. Embracing this approach across all marketing channels can empower both startups and their consumers to build trust-based relationships and confidence in the future.
Connect with Consumers on Social Media
Social media is the most powerful channel for building trust with a target audience. Modern marketing isn’t about selling but about interacting with people online and empowering them. The value of human connections has increased. Therefore, the role of social media is growing too.
Social networks are a perfect medium for constant interaction with consumers, listening to their precious feedback, exploring their needs and collecting market insights. It is a favorable environment for building buzz around a startup through engaging content and growing brand awareness through advertising and influencer marketing.
Be Flexible and Positive, But Stay Realistic
Flexibility and adaptivity are key for entrepreneurship at the different stages. Although it may sound paradoxical, they are needed to build business resilience to tough market conditions. Don’t stop marketing, innovating and being flexible to changes. Companies that are still doing it even throughout a recession come back stronger.
Stay positive to become a shelter of positivity for your consumers and give them the support that is so necessary when many things around seem bleak. Your audience will reflect you back with brand trust and loyalty that will help your business thrive even in a crisis.
Launching a startup in these times means facing unique challenges and taking unpredictable risks. The path to the better has never been easy, but it is definitely worth going. At least, it's what we at Hennii believe in.