How to be a startup founder in 2021? 5 lessons we learned from 2020?
10 minutes of reading
The year 2020 has really messed up. The International Monetary Fund estimated that the global economy would shrink by 4.4% in 2020 due to the pandemic. The organization called this decline the worst since the Great Depression in the 1930s... Despite massive vaccinations and widespread hope for a return to normalcy, we now know that some things will never be the same again.
We have stopped going to the shops. Online retail is the undisputed winner in the fight against the pandemic. According to accounting giant EY, 67% of shoppers still don't want to drive more than 5 kilometers to shop. This shift in shopping behavior is having a significant impact on online retail revenue growth, which is expected to reach $3.9 trillion globally by 2020. There are other important trends: the boom in telemedicine services, remote work and learning, and the acceleration of automation, such as in large stores. What do you need to know about this new reality when planning your startup?
Anticipate and plan
Let's start with something obvious - if you want to build a startup, you need to plan. How do you plan in a world where the specter of a pandemic still hovers? It's best to create multiple action scenarios, depending on the situation. What are the risks that could come your way? What are the opportunities that could be waiting for you around the next corner? What will be most important to you when making decisions about actions? Consider these questions ahead of time and don't be surprised. When faced with a new situation, we are not always guided by rational arguments. If you consider risks and opportunities when planning, it will be easier for you to adapt to change.
How can you prepare for different environmental scenarios? Below I present a simple way to create a matrix of chances and risks.
- First, assemble a team that includes not only company employees but also independent industry specialists.
- Ask them to identify the risks and chances in your environment (legal, economic, consumer or competitive) and determine the likelihood of their occurrence and impact on your business.
- Organize a collaborative brainstorming session to discuss the risks and chances and create a common list, then suggest ways to minimize the impact of the risks and take advantage of the opportunities to ensure they produce the best results for the business.
- For each proposed method of addressing risks/chances, evaluate the impact on the business and the cost of implementing the solution.
Chances and risks matrix
Thanks to this approach, you can now choose the actions that are ahead of the most likely negative event scenarios and prepare to seize the opportunities.
Be agile like a parkour participant
One constant in life is change. To quickly adapt to a new situation, you need to actively look for it instead of passively waiting for it to come. Constantly monitor the market for emerging trends. Also remember to listen to your customers - stay up to date on their expectations. What are their current needs? How have they changed their behavior? Companies that quickly changed their thinking about the market when it collided with COVID-19, embraced digitalization and new opportunities, and were prepared for the worst-case scenario managed the situation as quickly as possible and successfully mitigated the potential impact of the crisis.
Take your place on the Internet
Regardless of industry or company size, 2020 has significantly accelerated the transition of businesses to the Internet. Nearly every industry is currently looking for tools that will allow them to increase the effectiveness of their operations through the use of technology. This is not only benefiting the e-commerce solutions market, but also the electronic payment providers. A study by Blue Media shows that the share of fast electronic transfers (from 41% in 2019 to 48% in 2020), card payments (from 32% to 39%) and BLIK (from 24% to 33%) has increased significantly more than in previous years. The increased interest in online financial services and online payments is confirmed by data from Blik / Polish Payment Standard.
The popularization of remote work has increased the demand for systems that allow employees to communicate with each other and with other companies. This was felt by developers of e-learning systems, teleconferencing tools and VPN technology providers. In the new reality, projects like DoxyChain have gained prominence thanks to the use of blockchain technology, which can make the exchange and electronic signing of documents as reliable as their paper circulation, which we have become accustomed to since the invention of the papyrus.
What do all these phenomena mean for you and your startup? First of all, you can use all these innovations to recruit and manage a dispersed team more effectively. Were you afraid of working with people from other cities and countries? The pandemic has shown us that this is completely unnecessary. Involve people in the project according to their expertise, not according to where they live. Also remember that the expectations of the employees themselves have changed dramatically. Many professionals even expect the use of technology at work and more flexibility than before.
Second, digitization tools allow you to speak more efficiently with partners and investors, regardless of their location. More meetings and better contact with key stakeholders is a recipe for startup success.
And third, take something from the trends for yourself. If your startup involves elements of communications or internal business processes, consider whether there is an area that can be ... digitized. And all this to offer users even more convenience and the best standard on the market.
Take care of your team
While the right tools can make collaborating with a distributed team and effectively managing tasks more convenient than ever, it's important to remember that even the most sophisticated remote work system can fail if your employees don't care. How can you counteract this? We know that as a startup founder, you're probably running from meeting to meeting, and your mom hasn't been able to reach you in weeks. Still, you need to find time to take care of your team because without them, your business has little chance of surviving. What ideas that have worked for us and for big companies can you use to keep your coworkers on task?
Regular meetings and ongoing communication channel
Agree with your team on times for regular meetings, dates for meetings on specific topics and channels for ongoing communication. Create clear and simple rules for communication so as not to disrupt employees while still keeping in constant contact.
Set aside at least 30 minutes a month with each partner/co-worker. Find out what is going on in his/her life, if he/she is doing well and if his/her family is doing well. How is he/she coping, what problems does he/she have and what is limiting him/her. Try to find solutions to the current problems together. Also remember to explore his/her current expectations of cooperation and try to understand them, as they are often the basis of motivation.
Whether you work remotely or stationary, it's worth setting aside at least one Friday afternoon a month for a casual meeting. You can talk about your plans, ask employees to summarize their own week, or encourage them to share funny stories. By talking freely, you'll learn more about attitudes, ideas, and problems, and you'll build a real team bond.
Yes, many corporate managers introduced breaks into companies during the pandemic, where entire teams played games like charades, a virtual version of the Mafia, or organized HaxBall tournaments. Ideas for such activities abound and are well worth taking advantage of. And why? Collaborative team activities have a positive effect on work. Scientific research suggests that playing together increases the effectiveness of newly formed teams by up to 20%. 45 minutes of such fun is enough to improve the atmosphere and results (a link to this research can be found here).
- Virtual coffee break
Working in an office has many drawbacks, but one important pron is the spontaneous creation of relationships. Could you recreate such a situation virtually? Euler Hermes, has introduced Mystery Coffee Encounter where employees arrange to meet a random company employee for coffee. However, you don't need to create your own system. Similarly, Donut, a ready-made application integrated with Slack, brings coworkers together.
The pandemic has changed the way we work, rest, and do chores. We were forced to abandon old habits and develop new ones. Markets we thought we knew well have undergone a minor or major metamorphosis. If you are planning to build your own startup, you need to be aware of how much the world has changed.
Many industries have experienced a real digital revolution, not only in the area of providing products or services to consumers, but also in the collaboration with partners, and the work itself. The trend towards digitization of all aspects of life has accelerated and there are no signs that it will stop. Therefore, as an entrepreneur, you need to consider (or rethink) the current expectations of your target market. It won't work without up-to-date market monitoring, keeping an eye on emerging opportunities and threats, and developing action scenarios.
You must not forget your employees either. Although it is now easier than ever to assemble an interdisciplinary team of specialists from all over the world, you need to motivate them at the same time. To create a successful business, you need dedicated, well-coordinated people who will turn your vision into action.