While the startups in the Asia Pacific may be starving due to the pandemic, their DNA may create opportunities for them to survive this storm.
A 2020 Global Startup Ecosystem Report shows that the Asia Pacific emerged as one of the major beneficiaries of democratisation, as the region has gone from having 20 per cent of the world’s top startup ecosystems in 2012 to 30 per cent this year. But after the pandemic hit the startups, they are struggling on two fronts: capital and demand.
Coronavirus will lead to the worst recession since the Great Depression, the International Monetary Fund has projected in a recent world economic outlook. Volatility has spiked, in some cases to levels last seen during the global financial crisis, amid the uncertainty about the economic impact of the pandemic.
For all those startup founders and leaders who are dealing with the uncertainty of the pandemic, one thing is clear: this is the time to pivot and not panic.
While many startups have seen tightened purse strings of the investor, are regulating tighter cashflows and optimising resources, they are also eyeing government subsidies and resilience packages closely. Unforeseen challenges have been thrown into this mix, where the way we used to do business in the past, has been forced to change.
Movement restrictions and remote working culture have led to a boom in digital businesses – digital payments, e-commerce and logistics, telehealth, and short-form content platforms like TikTok have seen a spike in adoption, opening lucrative doors for tech startups from such sectors. But what about other businesses that might not be relevant or are in a paused state due to the pandemic?
Especially the enterprise sector, for whom this can be a huge challenge. First, for any business, being in the pause state is an outright no-no. Though operations could come to a semi standstill, this is the time that these companies can spend on looking ahead and innovating for the new world order. This is an evident business imperative. Startups that can adapt and fine-tune their products to the market demand will see through this time.
From skyrocketing stocks to mass layoffs, B2B SaaS companies are having a wild ride. Software-as-a-service startups are not the ones grabbing the most eyeballs since digital banks and driverless cars tend to dominate the headlines. As large companies move towards being digital due to the coronavirus crisis, the SaaS companies like Zoom and Twilio have seen their valuations jump. The litmus test with the coronavirus crisis will be whether these B2B products or services are deemed as ‘essential’ or ‘good to have’.
For us at Sansan, after witnessing the highest IPO of 2019 at the Tokyo Stock Exchange we thought the road ahead for our regional expansion is clear. But in a short period, things changed. Like others, we are also having to wage this war with the pandemic, quickly navigate the shifts, and accelerate our innovation efforts.
The fact that we have been a startup has honed us long enough to deal with the new world order we will very soon see. I believe the same goes for many other startups as well. This is the time to use the nimbleness, your capability to innovate, operational flexibility, and fluidity to adapt to the market changes.
It is also essential to seek solutions to the pressing problems that your customers are facing. If you can successfully do that, you can turn your business around. That is what we are doing.
We provide a cloud-based contact management solution to our customers, which allows the company to visualise all the connections within their company. These records are fed into the Sansan interface by an employee by simply scanning the business card using the Sansan phone app.
In the advent of remote working though, how do these companies continue to maintain an accurate contact database? How can companies sell effectively remotely with sales pipelines softening, meetings cancelled and lengthening sales cycles? Also, with lockdowns, the business card culture is already fading away – do we need an alternate and if so, why? These are the questions that we are answering our customers.
One approach is to reshape our business priorities and look for opportunity areas, amidst the new reality that surrounds us.
The most recent Global State of Remote Work report by videoconferencing company Owl Labs, which polled more than 3,000 employees across six continents, found that Asia had 9% more companies that do not allow remote work than the global average. Now with coronavirus-imposed lockdowns, remote work, if possible, is being adopted by organisations across Asia, as the means for business continuity.
Across ASEAN, as remote working picks up, we are witnessing an unprecedented shift in business culture and rituals, and we want to be right at the centre of all of this, helping our customers adapt to this change. We are taking business card exchange online across the region and launching new functions like integration with Microsoft Teams to make it easier for people meeting remotely to exchange contact information.
The P-word has been dominating virtual boardroom discussions world over: in this case not ‘pandemic’ but’ productivity’. The use of productivity apps will play an even greater role in helping startups weather this storm.
Every crisis has a silver lining – you just need to look for it. With sales events, customer meetings, and industry conferences being cancelled and pushed, all businesses must approach this problem with a positive outlook and a three-pillared strategy: Reshaping for the new normal, looking inwards to re-energise and embracing digital communications.
There are many startups in SEA whom I see pivoting or re-energising themselves with the current times:
Saas startups accelerate growth amid digitisation – A Barcelona based survey provider, Typeform said that their monthly recurring revenue has gone from 1% weekly growth pre-lockdown, to 6 per cent during quarantine. Work from home is too, driving their demand, and they’ve seen more usage across education and other sectors that weren’t using them so much.
Manoeuvring through disruption in the events industry – Spurred by the coronavirus crisis and on-ground event cancellations, Eventhub, an event technology company based in Japan has released in April, EventHub online, which can hold large scale conferences and webinars, as the future business growth avenue.
Logistics and food deliveries space heats up – The ride-hailing sector has seen emerging startups like the social carpooling app, Ryde and ride-hailing app TADA innovate by venturing into food delivery and courier services or accelerating their existing efforts in the space. TADA Fresh is offering drivers the means to keep earning and helping wet markets to keep a steady flow of income.
Mapping newer growth areas under healthcare – Given COVID-19, the Singaporean company WhiteCoat, a telehealth company, part of MOH’s regulatory sandbox, has been attracting a lot of patients to take online video consultations for their health problems. According to media reports, their traffic has been increasing by 25% every week, encouraging the startup to plan for expansion to other markets outside Singapore over time.
Some 3D manufacturers are now firing up printers to create personal protective equipment for healthcare workers, and startups used to making phone booths for offices are now producing coronavirus testing booths for healthcare facilities.
An EY report from March found that more than three-quarters of executives said they were either re-evaluating or already taking steps to push through automation and digital transformation.
In short, we cannot go back to the way we were. Instead, we must become a more adaptable, learning organisation competing through speed and innovation to stay relevant. It can be helpful to apply a technology mindset when rethinking the business and the roles of people.
Every decision you make signals to people and customers whether you will emerge from this crisis as the winner. Remember to send the right signals.
To join our platform, click here.
Stay updated with our upcoming events, subscribe to our newsletter here.