Majority of startups will change business model post-pandemic

MANAMA: Nearly two-thirds (63.1 per cent) of startups plan to change their business model in the post-pandemic business cycle, according to a new global survey that sought to assess the current state of the global entrepreneurship ecosystem.

The World Business Angels Investment Forum (WBAF), an affiliated partner of the G20 Global Partnership for Financial Inclusion (GPFI), surveyed business owners from more than 81 countries and across multiple industries.

Revealing findings during a virtual Press conference, the forum said it elicited opinions on issues in a variety of domains, ranging from financing, the workforce, business model realignment, and types of support that are needed during this turbulent economic period.

About a third of the respondents (36.1pc) said they have definite plans to pivot their business during this business cycle.

A majority (52.22pc) said they expect their funds would last three to six months without any additional funding; while 29.6pc reported that their current funds would last more than three months.

About two-fifths (41.1pc) of respondents reported a more than 50pc drop in market demand for their services or products, while 46.5pc of respondents believe that the impact of the pandemic will last six months to a year; 11.3pc believe it will persist beyond two years.

Affirming that the world is on the verge of a great disruption sparked by the pandemic, 39.9pc of respondents reported a drop in the valuation of their business, but 21.67pc reported an increase.

Funding, demand, and workforce represent 37.93pc of the challenges startups face, with funding ranking highest.

Additional insights from the WBAF survey highlighted impacts across all industries.

Consulting and professional services are the most heavily affected (29.02pc) and electronics the least (1.96pc).

There was a high level of agreement (74.88pc) among respondents about the need for and the benefits of liaising between business owners and policymakers.

It is interesting to note an equal downturn in short- and long-term investments (39.41pc) and widespread, complex contingency plans.

These included reducing costs, laying off staff (27.9pc) and seeking additional capital to sustain their business (41.38pc).

Speaking during the Press conference, Prof Inderjit Singh, the chairman of WBAF’s global startup committee, said, “As the world is faced with these widespread economic challenges, it is essential that leading organisations and their representatives take charge by raising awareness and proposing solutions. There is a general consensus among experts about several strategic areas that are recommended for recovery: focus on rebuilding operations and recuperating revenue, rethink the organisational infrastructure, and accelerate the adoption of technology. Only by designing novel business models can we rebuild the global economy and reshape the business ecosystem for future generations.”

The WBAF has submitted comprehensive policy recommendations to the G20 leadership in order to alert policymakers about the urgent needs of startups, as revealed by the survey.

As a response to Covid-19, the forum has invited all governments and municipalities to consider developing smart policies to convert cities to smart cities, ease access to the Internet, develop better bandwidths for faster Internet connections, and ease access to healthcare and financial services.

Governments must invest in the digital infrastructure of their communities such as Internet speed, fintech, healthcare, and smart cities as a response to Covid-19. These all will lead to a better digital transformation of communities, better healthcare systems, more financial inclusion and more equal opportunities in education.




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