Why is this the right time to build a start-up
Note: This is a personal opinion piece, I welcome any and all feedback.
COVID-19 is undoubtedly one of the biggest shared human tragedies of the Century. More than 1.5 Million confirmed diagnosis, 100,000 people dead, a third of world population under movement restrictions and world economies struggling to keep up. Given the context, many would tell aspiring founders that this is a terrible time to get on the white-board and draw up an idea for a new company. I say it’s the opposite, and unlike what your gut feeling might tell you, this could be a once in a lifetime opportunity to start a company.
As a society we operate under a certain set of rules, or assumptions — critical patients should be admitted to hospitals, children should go to school in the morning, child-care and work cannot be combined etc. Some of these assumptions eventually get converted into laws, while the rest pervade our daily lives as unsaid norms. However, in times of crises many of these assumptions are challenged and undermined. All of a sudden, authorities are forced to relax the laws, non-conformity to norms becomes acceptable and people start questioning — why are hospitals the designated spaces of care? Why do children need to go to school? Why can parents not take work meetings while attending to their children?
Challenging these assumptions often create new ways of working and organizing that give rise to bold business opportunities. The 2008 financial crises overturned the assumptions about ownership of assets and job security. As a result, companies like Airbnb and Uber were created around the business model of shared ownership and use of assets. Not to mention, hundreds of start-ups provided “gigs” to the skilled and unemployed labor force post-crises. This is of course not to say, that businesses are only born out of crises. In fact, the most innovative companies try to challenge these underlying societal assumptions on an on-going basis for their product development cycle. All I argue is that COVID-19 has expedited the process of challenging assumptions, creating the ideal opportunity to innovate.
The obvious question we therefore need to explore is — which assumptions are being overturned by the COVID-19 outbreak, and what are the open opportunities that founders should explore? Here are my top fifteen contenders (in no order of priority).
1.Hospitals may no longer be the primary centers for care: One of the main drivers in effective health-system response to COVID-19 was a distributed network of smaller community based care settings that drove wide-spread testing, and prevented patients from coming into large hospitals where they infected other patients. China has already announced a push towards more community clinics, and so this trend is likely here to stay. However with a distributed network comes its own challenges — like how do doctors keep connected to share best-practices? How do you create smaller sub-networks and enable shared resources amongst them so you still capture economies of scale? How do you staff care-givers such that they are associated with a community, and not an institution?
2. Telemedicine is here to stay: This trend is an old one but it never really picked up for several reasons — reimbursement was slow, patient to doctor connection is valuable to the treatment, medical staff is not particularly tech-savvy, and most importantly you need to be able to conduct a physical exam to diagnose and monitor the patient. However COVID-19 really pushed the boundaries here. Prior to COVID-19, 5% of care visits happened over telemedicine. During COVID-19, this number went up to 30–40%. By no means I am suggesting another telemedicine platform, but the trend will create opportunity for hundreds of side-services e.g., how can you create rapid, cheap home diagnostic systems (beyond the fitbits that exist), how can you create AR/VR to make patients feel that they are visiting and interacting with a doctor? Can you create triaging systems that help telemedicine platforms better re-route calls in times of high volume? Are there any specialty telemedicine platforms e.g., those focused on maternity health, or diabetes management rather than simple family medicine ones?
3. Clinicians may no longer require an MD to provide care: The value of university degrees have already diminished in many technical careers e.g., software development, but not for careers that are highly regulated and need license to practice. With the over-burdening of the healthcare system we saw doctors graduate early and released in the workforce, we saw doctors with expired licenses and/or in retirement come back to the workforce, we saw technicians and nurses being up-skilled using online trainings and given greater responsibilities, we saw doctors perform surgeries never performed before under the remote guidance of a specialist. Given this, what type of supporting services would enable up-skilling of technicians and nurses? What type of solutions would enable “remote procedures / surgeries”?
4. Individual data privacy and public health transparency will not be at odds: The underlying assumption here has been widely challenged during COVID-19. We have seen that countries with strong e-government platforms and digitized citizen profiles fared better in the war against COVID-19 (through contact tracing and isolation). South Korea e.g., used a combination of smartphone location data, surveillance camera footage, and credit card data to trace the movements of infected patients and deliver information to the public on hotspots. We have also seen public surveillance of COVID-19 symptoms (fever checks) at several checkpoints around the world including USA, which would have been considered as private healthcare data pre-COVID. So the question is, would the governments continue to collect such private healthcare data from individuals? Would countries continue to set-up public health check-points in case we are unable to find a vaccine in the next 18 months to curb resurgence? Is there any way that this data can be stored by the individual but still enable officials to monitor and safeguard public health? If not, how can we ensure that healthcare data is still secure and protected?
5. Companies will focus on building a diversified supply-chain: In the past couple of decades, most companies have focused on building single source, lean supply chains to optimize for cost. However, COVID-19 has pressure tested, and broken down the vast majority of these. Additionally, inward looking, Nationalistic export policies have compromised the trust companies had in locating overseas manufacturing. In the times to come, we will see an increased investment in diversified supply chains across industries. With that comes the question of greater pricing transparency, demand prediction, and real-time monitoring of shipments enabled by technology.
6. Work from home and online conferences will become the norm: This one is self-explanatory — Zoom stock prices went up from $70 / share pre-COVID, to $160 / share post-COVID. Many companies will realize the minimal impact on (and sometimes the increase in) productivity working from home added. Additionally, cash-strapped companies post-COVID will increasingly try to identify opportunities for cost-reduction with some of the prominent levers being reduction in operation costs for offices, and business travel for meetings. As such, there will be an increased demand for all services and products associated with increased work from home e.g., teleconferencing that supports large scale conferences, portal-like hardware for work from home, virtual team-building events, virtual “white-boarding” kits, corporate services to help employees create an “at-home office”, IT-services for work-from-home employees etc.
7. WFH also means remote monitoring and servicing: The tech-industry likely had a minimal impact from work from home, primarily because there is nowhere software developers “need to be”. But there are many industries that fundamentally require operation in-person. But are we being too narrow-minded here? Are there more jobs that can become remote if the right infrastructure is put in place therefore improving the efficiency of the industry. Can drones be leveraged for any kind of monitoring job (policing, construction sites, factories)? Can efficient software enable all call centers to become virtual? Can equipment servicing and troubleshooting be done fully remotely?
8. Parents will be increasingly involved in child education: With COVID-19, shut down of schools, lack of child-care and work from home has put an unprecedented amount of responsibility on parents to participate in child education. This ranges from creating educational plans, drafting activities, monitoring the outcomes and providing feedback. Although one can question if this trend will stick post-pandemic, we can all agree that there may be a sub-set of parents (especially those who will now continue to work from home) who will have discovered the rewarding experience of being involved in their child’s education. Given this, what type of new products can be developed, targeted at parents? Beyond schooling, what are supporting products to keep parents involved in their child’s life e.g., with reading, extra-curricular activities, overseeing homework?
9. K-12 education will move from schools to homes — or at least partially: This one is definitely controversial because schools not only serve the purpose for education, but also as centers for child care and family support. Additionally, it inherently puts an increased amount of responsibility on the family to support the education which is disadvantageous for children coming in from low-income, and sometimes even non-supportive backgrounds. However, despite this, we will definitely see an increased usage of technology, particularly in private schools, or for home-schooled students. Some of the interesting use-cases here that have emerged are software and hardware kits to “set up a virtual classroom at home” — imagine a connected notebook that enables teachers to review the work produced by students in real-time. Additionally, hardware at home that allows teachers to monitor a student’s body language, or observe cheating during a test administered virtually. Or, VR sets that enable students to create an avatar and participate in a virtual classroom.
10. There will be a significantly higher number of weddings in the next couple of years: There are two drivers for this; firstly, all of the postponed weddings of 2020 will be pushed into 2021, secondly, the quarantine and increased loneliness will push individuals to get married. As a result, you can expect a boom in the wedding industry for a couple of years post-COVID. What are some of the start-ups that can better support the increased demand in the wedding industry? This can range from “wedding” insurance, better supplier management, transparency on availability, wedding related task rabbit, transparency on wedding related bargains and deals etc.
11. And babies: Every crisis brings a baby boom and COVID-19 is no different. In fact, the global supply-chain disruption has also meant a shortage of contraception around the world. Similar to weddings, this means a ripe market for baby/birth related products.
12. Travel will be different, and more painful than before: 9/11 changed the landscape of travel significantly paving the way for many travel security hardware and service companies (including TSA). The question is, how would travel change in the post-pandemic world especially if a vaccine remains undiscovered. My prediction is that routine health checks in airports, along with security checks will become common. Additionally, there will be a push towards increasingly sanitizing planes, airports or any public places for that matter. Finally, consumers themselves would increase protection by purchasing more personal protective and sanitizing products, and travel insurance.
13. There will be a greater focus on sustainability and protecting mother Earth: Most of you would have seen the satellite images from China with clear air, or the pictures of the Himalayas spotted from Indian cities, or the (false) rumors about dolphins returning to the Venetian canals. The COVID-19 outbreak, and the lock down around the world has given the much-needed time for the Earth to heal, awakening the human consciousness to the damage we were causing our planet. Post-COVID, sustainability will be a cross-cutting trend across all industries, shift towards organic food, durable clothing vs. fast fashion, ethically sourced supply chains, taxation on individuals and corporations on carbon footprint etc. There are a series of products that can help support this shift including a personal home metering system that tracks carbon footprint (similar to water meters), a universal bar-code that provides supply chain transparency, consumer products that are sustainable, recycling technology etc.
14. Personal wellness will have a renewed focus: Two weeks prior to the shelter-in-place guidelines, shelves of Vitamin C were wiped out of pharmacies in the Bay Area. Headspace saw a surge in their user-base beyond their capacity, as corporations raced to provide corporate subscriptions to the mindfulness app. We also saw a surge in “live” fitness classes, and fitness groups over Zoom. Although these trends existed prior to COVID-19, they have certainly been accelerated. Millennials who have lived through the pandemic will continue to focus on personal wellness. Products that are clear contenders are online / virtual classes, In-a-box fitness devices (think Peloton), healthy food subscriptions (think Daily Harvest), personalized meditation plans, virtual therapy and support circles. Given a lot of these exist today, but have not been widely adopted, I believe the innovation would come through the business model (similar to Headspace focused on corporate subscriptions).
15. Everything will be sold online, especially for the elderly: My 57 year old mom who lives in Pakistan, and only uses her smart-phone for WhatsApp, was forced to download an online grocery, and pharmacy app given her children’s strict instructions to not leave the house. Although the UI of the application she was using was not well done, she discovered the convenience of ordering groceries to her door-steps and fell in love with it. According to her, why would she ever leave the house for groceries again? The truth is that we have an entire generation of 50–60+ year consumers, who were not consumers of online retail before, but have now been forced to discover this world (Nearly 40% of online retail in March were first time users). They also make for great customers in the long term because the added value of convenience is much higher for them (e.g., some may not be able to physically make a grocery run). However, no online retail experience caters to this generation. How would you re-create the online experience for groceries, pharmacies, clothing, furniture, handymen for the 50–60+ generation who has now suddenly found their way online?
And a bonus one…
16. There will be “winner” markets and “loser” markets post-COVID: As you think of your next big start-up idea, you cannot forget the implications of the global economy; this includes both micro (customer) and macro (geography). As you ideate and prioritize, you should think hard about who will pay and why. Start-ups that offer increased efficiency and productivity to companies, as they look down-size, will be an easier sell. Luxury, organic clothing that is direct to consumers, as the economy slows down will be a much harder sell. There will also be geographies more impacted than others — Asian markets will likely be less hit by the economic downturn than European / American. So perhaps as you think about your online retail store for the elderly idea, think beyond the Western markets as your entry point.