COVID has been a palpable disruptor to local enterprises, triggering job losses, supply-chain problems, travel restrictions, and business continuity challenges en route to infecting over 140,000 Filipinos. Startups, which are typically seen as ‘industry disruptors,’ now find themselves in an unfamiliar position—as the disrupted.
A recent report by PwC Philippines revealed that almost 50% of tech startups are greatly concerned about the impact of COVID-19 on their operations.
Amid the pandemic, startups are faced with critical challenges—including capital shock and reduced consumer demand. Some are also struggling to survive as they experience movement challenges that are preventing growth and traction in building and scaling.
This according to Carlo Calimon, Director of Startup Village during a webinar series ‘Disruptors, Disrupted’ organized by ON3. Calimon was joined by Diane Eustaquio, Executive Director of IdeaSpace, in the panel discussion.
While many businesses have scaled-down, Calimon said that startups are busier than ever in the new normal.
According to PwC, 21% of startup founders say that the outbreak resulted in increased demand for their services and products while 49% started offering a new product/service during the Enhanced Community Quarantine.
This is a testament to the consumer shift to more digital lifestyles and the critical role of startups in creating new possibilities, enhancing growth, and finding critical solutions to new issues brought on by COVI-19.
Over 50% of today’s Fortune 500 companies were founded during an economic contraction and 50 of the fabled ‘tech unicorns’ were born during the last financial crisis. Crisis, Calimon points out, also “presented opportunities for a lot of startups to step up to the plate.”
He cited Kumu, MyKuya, AIDE, and Zagana as rising stars in the new normal, because “[…] people started looking at these startups and allowing them to take advantage of the new attention to generating more traction and business for themselves.”
Maintaining customer relevance
Now that essential products and services have become top of mind for many Filipino consumers, non-essential startups are faced with a crisis of relevance. For them, it is now pivoting or perishes.
“When you say be agile or be adaptive,” said Eustaquio. “It is really listening to the customer. Focus on the customer experience. When you’re able to focus on the customer experience, you’ll always be developing a product that is relevant to your customers—to the people who pay for your product.”
Eustaquio also advised startups to “COVID-proof” their startups so that their business is not just sustainable, but also attractive to investors.
According to Eustaquio, sustainability is a critical component during this unpredictable time. She posed the question, “Today, you’re making money. When the pandemic is over, is this product still relevant?”
While businesses will have their own unique issues, it has become astoundingly clear that innovation is and will continue to be very important during a crisis like COVID-19. And as innovation natives, the ability of startups to identify pockets of opportunity in crisis will be all but necessary in creating new possibilities in this new normal.
These ideas will be further explored in upcoming episodes of Disruptors, Disrupted, ON3’s three-part webinar series about the startup ecosystem in the Philippines during COVID-19. Stream the full webinar on-demand at ON3now.com.