Ep7 8 reasons to start a business during this pandemic
Welcome to The Belinda Esterhammer Show! This is a podcast about the art of winging it - whether it’s business, marketing, startups or life… well sort of.
Today I am talking about how this global pandemic is in many ways serving as a creational catalyst and 8 reasons to launch your startup right now. Here's why.
I get it. Starting a business in the midst of a global economic crisis is the last thing on your lockdown to-do list. But maybe you've watched all there is that Netflix has to offer, baked all the banana bread you can bake and you've run out of dance moves to share on TikTok.
Hear me out, because it might not be such a crazy idea to start your business now.
1. Successful businesses were often born in chaotic times
Looking at historical data and recessions - challenging times can be seen as good times to start a business. Airbnb, Disney, IBM, HP, Microsoft, Slack, Pinterest, Uber and Venmo are just a few that were established in challenging times.
Before you jump right into developing a business you need to know if you are actually offering a solution to an actual problem, a problem that developed during the pandemic or a problem you predict for the future. Don't come up with a problem that's not actually a problem. The easiest way to validate your idea is to talk to your ICA - your ideal customer avatar. More on this on another episode.
Look at customer needs now and post-pandemic, instead of pre-covid-19. The world is not going to be the same again. People all over the world are thinking of ways to solve problems for challenges that we've faced in the past months. Some people have a lot of time to do research on their hand including validating their business idea.
There's also been a surge in people wanting to work purpose-driven on something meaningful and important to them rather than copy pasting slide decks for their bosses.
2. Easy access to top talent
Starting a business and hiring people now means you have amazing access to top talent and their wages are less competitive. It's easier to find qualified applicants during a crisis than an economic boom. This applies also to the gig economy - hiring a freelancer to help you with launching your venture is cheaper right now as working from home allows many people to take on virtual side projects. Right now is also the perfect time to look for a co-founder in case you need one.
3. Sweat equity and bootstrapping
It's not impossible but much harder to get funding right now. Investors can't predict how the world will look like in 2 years or even 6 months. Not having investors too early on means you get to experiment and grow with your business. Create your MVP - minimum viable product on a shoestring. Really go and create as much as you can on your own with your own resources and if needed hire freelancers to help you. Apart from your MVP, build your network, talk to people and know your industry well before approaching investors. Sweat equity is the time and effort you put into your venture as founder.
Sweat Equity is always the best equity. The next best version of equity is Customer Equity where you get customers coming in buying from you and that's how you're funding your growth. Third is using kickstarter/IndieGogo as a way to support you. The last thing on the list is venture capital money. They aren't giving it to you for charity and the minute you take that money, that's not the end, but when the obligation really starts. You thought you had an obligation to grow your business before you took the money? You have no idea.
Mark Cuban about Sweat equity
4. Safety net
It is important to be realistic with your personal financial situation. How long are you able to support yourself and maybe also your family and be able to pay your bills? I am not recommending you to immediately quit your stable job in this pandemic to go and play startup. Instead chances are high your current employer might have asked you to take leave, put you on furlough, reduced your hours or asked if you can go on unpaid leave for a month or two. These are opportunities for you to work on your venture without losing your safety net. And in case you are still working full-time in your job, chances are high you are still (at least partly) working from home and you can use the time you save commuting or being unproductive at your day job and scrolling through memes for working on your side hustle. Even if it's one hour a work day and six hours over the weekend, you are looking at eleven hours more a week that you've spend working on your company compared to... zero right now.
Also, starting a company cost less than ever before. There's an abundance of software and tools you can use and plenty of forums and tutorials that can help you get started.
5. Marketing is cheaper right now
It's cheaper now to hire a marketing freelancer to help you get the company off the ground than before the pandemic. Advertisement rates also declined drastically as many businesses are also reducing or completely stopping their ad spend. With rates dropping you can build your brand for much cheaper now. If you don't have budget, focus on organic marketing, SEO and content creation. Don't be stingy when it comes to building your solid brand as this is what will help you attract customers. There are plenty of things you can DIY but when it comes to developing a professional logo, branding guidelines and other assets I recommend you to work with a professional.
6. Less competition
Your competition is currently much smaller than pre-pandemic including the years that will follow. There are less investments into companies including your competitors which means that you don't have to compete against 8 well funded competitors in the same market. Right now might even be a good time to start a travel company that solves a solution around post-pandemic traveling.
7. Be flexible
Whatever venture you're building, have in mind that the world will never going to be the same. No one would have predicted the extend of this crisis and we are uncertain how things are going to look even several months down the line.
Make flexibility your best buddy and move quickly when you see opportunities come across your way. The great thing about early stage and small companies is that they can pivot really quick and adapt to changes better than any large corporate dinosaur. Pivoting is important, and I am not talking about Ross Geller's sofa in Friends.
A pivot in the startup world describes a shift in the business strategy and direction of the company. Usually this happens when the industry changes or customer feedback demands a re-evaluation of the product to actually solve their problem.
8. One step after another
Most importantly, don't rush launching a company right now. You need to prioritise your mental health. Don't skip the important part of the business - the business plan and business validation. They are part of your solid foundation. This will later help you to be efficient and also scale efficiently. As mentioned before it's ok to delay putting too much skin in the game too early.
There are many problems that the world is facing right now and plenty of opportunities for the future entrepreneur. Problems like working from home, education, supply chains, lockdown entertainment, shopping and so many more. Whatever you do, you need to address a need.
And also before drinking the startup Kool-Aid make sure you know your why behind your intention to start this venture and make sure that your values, mission and vision are align with whatever you do. In case you haven't tune in to episode 1 and discover how you can find your WHY.
Lastly, we are in a freaking global pandemic, not a productivity contest. So whatever you do, do what feels right to you and prioritise your mental health and loved ones.
Until next Friday where I will be back with another interview and special guest,
Belinda
Join me every other Friday where I will share my thoughts, tips, hacks and generally anything you can imagine around life, business, marketing and my world and how to wing life. You can listen, find, download, share and worship this podcast anywhere you can find podcasts and if you feel the urge to get in touch with me drop me a message!
And in case you wondered why this podcast is about the art of winging it, it’s because I’m winging right now.