Ideas That Meet Current Demands
In the current climate, millions of people have either lost their jobs or are working from home. The uncertainty creates opportunities for them to generate something new out of a lifelong dream.
One such example is Tim Chen, co-founder of NerdWallet. After being laid off during the 2008 financial crisis, he decided it was time to find a viable idea.
Chen got the idea for NerdWallet from his sister, who was looking to find a credit card with lower transaction fees for foreign transactions. He couldn’t find a list of credit cards on Google, and he decided to create one.
His startup costs for the software and domain fees were $800. The current value of NerdWallet is just over half a billion dollars, and the website has over 10 million monthly visitors.
In another example, Lara Vandenberg launched her online marketplace, Publicist. There are currently 57 million freelancers in America, which is 35% of the workforce, and on the website, freelancers in PR and communications make themselves available to businesses. Publicist charges hirers 20% per project and offers freelancers project-based work opportunities.
The Dynamics Behind Startups During a Crisis
It is always easier to find a talent pool of people during a crisis. Talent can be sourced locally or internationally, and it is often cheaper to hire during a crisis. This offers the opportunity to pump any extra money into growing the new startup.
Recessions also tend to offer cheaper marketing opportunities, and ad rates do decline, even on Google, Instagram, YouTube, and Facebook. Startups can look for affordable options on these platforms or can look to cheaper platforms like Twitch. During a recession, organic marketing can help with the initial boost.
Competition is usually not a threat during a recession, and this offers a new business the opportunity to get a footing in the market. According to business experts, many existing companies usually scale down during recessions. Business opportunities can be found even in most affected industries. Currently, these include travel and entertainment.
One of the greatest advantages of developing a business in this sort of climate is that its expenses are still relatively low, and the business can make changes easily as they are needed without damage. They are also able to respond to external changes faster in the beginning.
As nimble as new businesses are amid a financial crisis, they need to start slowly as they first focus on building a strong foundation and efficient scaling. Also, money is difficult to raise, and it is better to start small, using money as efficiently as possible.
When an idea can solve a problem, then it forms the basis for a wonderful business idea. Across the globe, people have used their time in lockdown to research ideas and now may be as good a time as ever to optimize them.