Why must startups adapt to change and understand the change in consumer behaviour due to the pandemic?
By Niraj Bora
The coronavirus pandemic has created unexpected challenges for businesses. From mass layoffs to salary cuts, startups have had to take tough decisions in order to survive. A recent report by NASSCOM suggests that 70 percent of tech startups have a run way of less than three months. The report also suggests that 30-40 percent of startups have temporarily halted their operations or are in process of closing down while 54 percent of them are looking to pivot to new business opportunities.
In order to survive through these unprecedented changes, startups must be ready to adapt and change their business model as per changing consumer behaviour. Over the last few months, consumers have changed the way they shop, they think and consume data. Most of the changes are probably temporary in nature from a consumption point of you. However, the way it is consumed will see more structural changes in the future. As a startup, one must carefully observe and analyse these changes and take the necessary steps to cater to these changes. A simple example for this can be the way food delivery companies started delivering essentials during the lockdown period because it was the need of the hour. Categories like gyms and fitness/healthcare have seen online consultations and providing gym like fitness services on their apps.
Here are reasons why startups must be ready to make the change and adapt their business model as per changing consumer behaviour:
Change in order to survive: Till we get past this pandemic, survival has to be the only focus for startups. The question that startup founders must ask themselves is ‘What must be done in order to survive’? Most of the large corporations and MNCs are not built to adapt and implement but this is a very good opportunity for any startup that can work faster than the traditional large competitors. Pivot your business model before someone else does it. Adapting to change must be a lot easier for a startup that is agile and lean. Adapting to change is something that every startup should do and excel at, not just for the pandemic. Changing market dynamics and competition always require pivoting for a startup. Introspecting and learning to adapt is always the case while growing a business. Most of today’s unicorns and large tech companies started with something else altogether, and then pivoted/expanded to other categories to grow further.
Change in order to conserve cash: Identify new revenue streams and let go off expenses that are burning cash. With work from home becoming the new normal, relook at your real estate related office expenses. Conserving cash is crucial to your business. Identify sources of revenue and amplify your efforts towards maximising those revenues in order to run your day to day operations.
Change in order to keep your customers: By pivoting their business, startups can find a way to still engage with their current customers. Changing consumer behaviour is a changing dynamic that a startup needs to keep an eye on. Marketing and getting the consumer eyeballs is an ongoing effort which is never enough for a startup. Consumer behaviour changes are observed from consuming medium/method point of view, and change in consumption patterns. Like in the case of the pandemic, the shift to online buying, online education and online consultations are where the trend moved, and companies need to shift their offerings accordingly. Consumers are trying to avoid going out and getting in contact with people. So, offerings aligned with these restrictions can be figured out. For instance, B2B Agri tech startups moved from restaurant segments to other segments after lockdown was announced. Health tech startups started video consultations from online appointments and other offerings. Startups with manufacturing setups started manufacturing sanitisers, ventilators, or whatever the market required at this point in time.
Adapting to change and consumer behaviour is an inherent part of improvisation and growth strategy for any startup. Unless one does that, chances of becoming obsolete increases once someone else spots that growing trend.
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