The Covid-19 pandemic has gripped a major part of the world in its horror. The new infected cases being reported every day are on the rise. India is still struggling to contain the first wave of the widespread pandemic, which shook the world in the early months of 2020. Considering that many other countries are reporting to their second wave of the virus, it seems that respite might be short-lived; that is when India gets some.
The effects of the virus are not only limited to the health and safety of human lives, even the economy and social life cycles of human civilisation has been ruptured. World as well as national GDP growth has taken a dip to a negative 23.9%, the lowest in the history of independent India. Big corporations have laid off people, many smaller ones have closed up shop altogether. The laying off didn’t help improve the purchasing power of consumers, and starting a new business seems improbable.
Entrepreneurship is a career choice that is considered one of the toughest in the industry. It involves risk-taking, dealing with every aspect of a business, and navigating through the ever-changing market trends and situations while competing with the existing giants in the market.
Covid-19 has pushed even well-settled market-leading companies off the track. This poses a question on the future of almost every entrepreneurial venture out there. The unprecedented situations prevailing in the world demand cash influx by the businesses to survive, which startups are short on. So, how feasible is the entrepreneurial route in this new normal?
Let’s take a minute here to digest what this “New Normal” is. Pandemics such as the Covid-19 have been a once-in-a-century event so far, and end up radically changing how we operate in the world. They profoundly impact various aspects of life, ranging from the environment, culture, social norms, technology, businesses and how we perceive the world and prioritise; everything undergoes change.
This evident transition from the previous setting to the updated acceptable norms brought on by Covid-19 has given rise to an illusion of, rightly coined, the ‘New Normal.’ This new normal transcends environmental, social, economic, physical, psychological and business realms of humans as a species. It brings with itself its share of new obstructions and opportunities. The last economic depression brought on various startups such as WhatsApp, Uber, Instagram, etc. As there have been various changes in our way of living, new opportunities are to be found and explored in a similar fashion.
Covid-19 has brought an onslaught on the future prospects of most businesses, the effects of which are not easy to contemplate. The Ministry of Commerce and Industry shows that there has been a 50% drop in the number of newly registered businesses as compared to last year. The hospitality industry has its revenue take a nose dive with a 65% decline. Fin-tech, logistics, aviation, retail, non-essential FMCG, entertainment and many other industries saw a huge margin of their revenue streams being completely wiped out.
The supply chain and logistics, both of which are crucial for availing essential goods to the masses, were also left crippled due to the imposition of the nation-wide lockdown. Since it’s anybody’s guess at the moment as to when we will win this fight against Covid-19, corporations have already started taking up necessary to survive until the dust settles.
Only the toughest and most strategic businesses would be left standing. Startups are finding it the hardest to survive, given the cash crunch they’re facing. With revenue streams being cut down to less than half in most cases and investors lining up to fund in such uncertain times, startups face the biggest risk of being wiped out of the map.
When a business is closed down in such scenarios, its implications are felt by many. Entrepreneurs who have put in their blood and sweat in the company have to see their dreams shattered. An entrepreneur brings together a team to execute his idea. Some members of this team make the leader’s dream their own. Others look at the company as a step towards progress in their careers. When a startup closes down, its employees lose their jobs, career track, dreams and earnings. Investors who have funded them face huge losses and probably wouldn’t be comfortable partnering up with a new startup anytime soon.
Businesses create a larger ecosystem, wherein one broken connection affects many other nodes. Companies that provide services to these startups see their revenues shrink as well. Be it supply chain, marketing channels, dealers, vendors or distribution channels, all face the heat of a company’s lost business.
Customers are also at a loss in such situations. Such mass closure of businesses due to the pandemic makes me wonder how many wonderful products and services would now not never the day of light or get the recognition they deserve. As a consumer, we are deprived of these products as options in the market.
On the other hand, there are certain industries such as OTT Platforms, Edu-tech, life and health insurance that have not been affected to such an extend. Yet, most businesses are impelled to reassess their strategies in light of sustainability becoming a matter of concern.
Technology adaptation as the industry norm is being done at the fastest rate ever in over a century. Technology is hence expected to keep expeditiously change businesses as well as lives of people for a couple of years to come. Human civilisation is moving towards a digital age at at a much faster pace now than ever before. This pace will bring in new gaps in existing methods, which in-turn will bring new avenues to be explored by free-spirited entrepreneurs.
One of the other major shifts that Covid-19 has brought is consumers prioritising hygiene, nutrition and safety in their day-to-day lives. Assuring zero contact service has become a measure in ensuring the safety of both the consumer and the employee. More than that, safety is the first parameter with which consumers have started changing their perception of the brand. Entrepreneurs coming up in this age would need to inculcate this in their basic business values.
The world has gone haywire since the pandemic started spreading through civilisations across geographies. Uncertainty in the market and personal life is high and risks for entrepreneurs are much dire now more than ever before, though there is a silver lining.
Entrepreneurs are innovators, they see the world in a different way than others and solve problems instead of getting limited by it. These are the capabilities that one needs to steer through never foreseen scenarios. The ‘New Normal’ will bring a new age of entrepreneurship ventures and time will tell what’s in store for them.