IT is a fact that many businesses are crippled in the face of the current pandemic as companies struggle to keep business going. However, new opportunities are also emerging amidst the changing landscape, particularly in the tech startup space.If anything, the current crisis presents startups with a chance to relook their products and business models to cater to a new market.
“This is a good test bed and an opportunity for startups to pivot by being alert to what is happening on the ground and by responding to the real-time environment. Pivots are not new for startups. It is a part of their journey. They just need to ensure that they can sustain it, ” says Cyberview Sdn Bhd’s Siti Shafinaz Mohd Salim.
In a recent webinar organised by Cyberview titled “Startups: Navigating the new norm”, Shafinaz identifies artificial intelligence, Internet of Things (IoT), robotics and smart healthcare as among the upcoming segments that startups can tap into.
As more traditional companies look into digitalisation and automation, startups are primed to offer such solutions.
“We should be hungry at a time like this. Identify where the buying opportunity is in this space. Make use of this new normal and of the emerging technology that is out there.
“It is also a good time for those with ideas to roll out their products.
“If you are a new entrepreneur, I think this is a good time to start out, ” she says.
Her sentiments were echoed by Finnext Capital business director Aizat Rahim and TheLorry co-founder and managing director Nadhir Ashafiq.
Following the announcement of the movement control order (MCO) in March, TheLorry quickly rolled out a new service as it adapted to the changing needs of its customers.
It launched TheLorry Grocer within a week to help cover some of the revenue loss from its consumer business.
Amidst the challenging circumstances, Nadhir points out that there are steps that entrepreneurs can take to reduce some of the pain.
“There are a lot of things that we cannot control. But we can control our expenses. So map out your projections to know your cash position. And if there are ways to get cash in faster, explore that.
“This can include invoice financing or giving your customers a discount if they can pay up faster, ” he says.Nadhir opines that there are also opportunities to tap in the online grocery and food delivery services as well as e-learning, virtual collaboration and cybersecurity.
”Startups have limited resources and they need to pick business verticals that will give them the best return on investment. We are of the opinion that post-MCO, there will still be opportunities in these areas. I think they are long-term opportunities.
“Although some spaces may get crowded, like grocery for example, you can still make money if you have a certain value to offer and have the right database to leverage on, ” he says.
Meanwhile, Aizat notes that startups will also need time to recover once the current situation stabilises.
“Startups will take about 6-12 months to get back to their original projections. And it will be hard to get investments. But venture capitals and investors are still looking for investments.
“They are just more picky with what they invest in now, ” he says.
Aizat advises startups to focus on providing digital products and solutions and to remain flexible.
“Keep testing and trying out new solutions that people want. Also be mindful of your cash position, which is different from your revenue. And if you have a network of supporters like an angel investor, try to get a bridging loan instead of raising funds now because it will be harder to navigate valuations, ” he says.
In coming up with solutions, Aizat also urges startups to understand the needs of their users as much as possible.
“Pick products that serve your database. And be mindful of the user experience as well. That is important to keep users with you. There will be some players that will fall out during this time, but that happens in any industry.
“Keep an eye out on anything that impacts your direct stakeholders like your employees and your customers. “We also ask startups to look at their customers’ customers. You won’t be able to fix all the problems on your own so find partners that can help alleviate their pain points. If your customers’ customers are not doing well, then there’s a chance that your customers will also be in trouble, ” he shares.
Shafinaz adds that with more digital transactions taking place now, there is also a lot more data that can be obtained to help startups better evaluate the feasibility of their products and business plans. This will help them formulate better strategies and solutions as they adapt to the new normal.
“Stay agile. This is a time that startups can learn from, ” she says.That said, these are notably challenging times, even for agile startups. Entrepreneurs will have to remain steadfast in charging forward while keeping their teams and the business together.
“As entrepreneurs, we’re also affected. These are tough times and only tough guys will survive. I’ve had my own breakdowns as well. But do what you can to control what you can.
“Map out what you can and can’t control and work with it. And then find opportunities around you.
“I think there are many examples of entrepreneurs adapting to survive and this shows that entrepreneurs can do it. They are a special breed of people and they’ll find ways to get through, ” says Nadhir.
— to www.thestar.com.my