Entrepreneurs: How Do You Optimize for the Pandemic Startup Boom?
The COVID-19 pandemic has fueled an unprecedented wave in startup creation. But how many founders are prepared to make the most of it?
The pandemic catapulted unemployment rates and established a nebulous layer of economic uncertainty that’s destabilized the world. Yet, for the entrepreneurial-minded, that combination spells great opportunity.
The pandemic era has revealed an abundance of business opportunities. Both experienced founders and novices wanting to shift their professional trajectories toward entrepreneurship are fueling a worldwide boom in startup creation. However, with every 9 out of 10 startups failing to meet a desired exit, boom or not, how many of these new companies and new entrepreneurs will actually make it?
A Startup Boom is Born
In the U.S, applications for starting a new business jumped +95% in 2020 compared to 2019, reaching an all-time high for entrepreneurial pursuits. This upward trend is strikingly evident in the U.S. Census chart below.
It was the pandemic boom felt around the world. New businesses also spiked in France (+20% increase year-over-year), the UK (+30% increase YOY), and Japan (+14% increase YOY).
Many of these new companies were born out of a need to transition primarily offline-sales-based companies to the digital environment, allowing for “traditional” businesses to stay alive during the pandemic amidst shut downs and distancing protocols.
The Inevitable Modernization of Traditional Businesses, Accelerated
Key industries that have benefitted from digitization include real estate, insurance, fitness, and telehealth, among several others. At ELEV^TE, we’ve launched pandemic-era startups in tele-law, fitness, and tele-therapy. JusticeIQ is the legal advocate in your pocket; Aktiv is a direct-to-community network for independent fitness creators; and Frame is your therapist, online and in your pocket.
But how many founders are prepared to fast-track traditional businesses to adequately meet modern consumer demands? How many possess the business vertical expertise, entrepreneurial skills, and grit to champion these startups from starting point to finish line?
According to the Forbes Technology Council, “Such a natural accelerator of startups as the pandemic has undoubtedly had a positive effect on the global economy. These developments on the individual entrepreneurship level are likely to aid numerous economies to quickly defeat the consequences of the pandemic.”
Yet, Forbes is also quick to predict trouble ahead for many new startups. Many will succumb to more advanced competition or struggle to find their market fit. This big boom of new startups also inherently foreshadows a future wave of bankruptcies.
Opportunity, Meet Preparation
ELEV^TE creates the supportive environment necessary for the next level of entrepreneurs to thrive. As an early-stage startup studio, we function as a factory to move these new companies along key milestones, ushering them from ideation to product market fit.
According to research conducted by the Global Startup Studio Network (GSSN), “seed-stage investments for startups created by top-tier studios are more likely (34%) to result in an exit than the average Series D investment (27%), while some studios boast a 50% or higher success rate.” GSSN goes on to suggest that there is a high correlation between investment-network-supported startups and company success, especially at early stages.
This is in part because, in the pivotal early stages, many high-potential business ideas succumb to startup-killers like bad timing, poor business model, lack of network and pitching skills, and poor execution. When founders partner with a studio like ELEV^TE, however, they benefit from decades of existing entrepreneurial experience, a standardized execution process, networking and pitching coaching, shared in-house resources, and all the tech support they will need to build and refine their product or service.
Look For a Work Horse, Not a Unicorn
The typical pre-pandemic startup model involves VC’s, incubators, and accelerators each looking for the next unicorn. Generally, they place their investments within a small pool of proven founders whose startups already have traction. In the process, they turn down many skilled businesspeople with high-potential ideas, but who lack the resources to gain a certain level of VC-approved momentum.
Enter the pandemic, which shifted the entrepreneurial landscape and unleashed a plethora of opportunities for previously overlooked founders. The pandemic also spotlighted many existing issues within industries. A common problematic thread was that many were not positioned well for the increasingly digital, subscription, and on-demand preferences of the modern consumer.
Who are the people most qualified to position these industries for the future? The businesspeople who work in them day in and day out, and have an in-depth understanding of their customer base. In other words, those who are experts in a specific industry are the most qualified to redesign their traditional business vertical into a digitally thriving enterprise.
The catch-22 here is that many of these potential founders lack the technical, pitching, networking, and entrepreneurial skills that they will need to appeal to investors and scale their business. Enter a startup studio like ELEV^TE. ELEV^TE provides founders with a founding team right out of the gate. Founders receive tech support, shared in-house resources, talent across creative, tech, and leadership teams; a playbook outlining a standardized roadmap optimized for success, and the long-term support of a technical co-founding studio.
Many pandemic-era founders are entering the startup arena from a place of lack or desperation. Maybe they lost their job or no longer feel secure in corporate roles. Yet, it takes much more than willingness and commitment to make a startup successful. ELEV^TE re-educates founders and ensures they have the experience, mindset, process, and problem-solving methodology that great entrepreneurs need.
Are You Ready?
As an entrepreneur trying to launch a business during this boom, the real question becomes: how prepared are you to take your company from the idea stage to product market fit? Do you have the networking skills, business expertise, pitching know-how, and execution practices necessary to move your startup along the key milestones that generate traction and appeal to investors?
Since the rise of startups is projected to continue, the number of new companies that fail will also be massive. As an entrepreneur, how can you protect your odds? Partnering with a studio to get technical support, divert some of the financial risk, and benefit from qualified leadership is a smart step.
Written by Janet M Early
ELEV^TE is an early stage venture studio and fund that’s looking to disrupt the way the current venture model works and the way the founder selection process is handled. We believe there’s a whole vertical of overlooked founders that we can potentially unlock.
Connect with us on LinkedIn or check out our website.
