Why the virus that stopped the world, opens a door for tech start-ups
Though too early to fully measure the impact of the coronavirus (COVID-19) that has largely shut down the world, we already know that the coronavirus will have strong implications for global markets and economies, but more specifically for many traditional businesses and their survival.
According to the recent report from The Wall Street Journal, even Apple, one of the biggest global tech giants has faced some problems, closing the retail stores they rely on to sell, support and educate customers on their products.
During these difficult times the survival of many companies will depend on their ability to adjust to a new reality in which every-day social interactions are altered, travel is restricted, and general economic activity is limited.
While traditional financial institutions have already struggled to stay relevant due to their lack of digital fluency, it is today, more than ever, that the ‘digital era’ acquires a new meaning, as the mass majority of people turn to the online world not only to stay connected, but also to execute their regular daily activities.
Currently, most, if not all, industries in the world are influenced by technology. However, in many cases, technological advancements have more to do with the improvement of workflows, equipment, and manufacturing processes, rather than the daily ‘cloud-native’ operations typical for tech start-ups.
As a wave of work from home polices and mandatory / voluntary quarantines come into force around the world, it is tech start-ups which are far more reliant on tech than they are on consumer facing scenarios or human capital intensive supply chains to generate revenue – and this makes them far more immune to the downturn in high-street spending.
More specific to the stock broking industry, social isolation has led to an upward trend in interest in the capital markets, particularly in China, despite the recent market volatility, as mass redundancies impact personal cashflow and ability to generate wealth through traditional means.
As Warren Buffet says “there’s always a bull market somewhere”, as global indexes that typically track the economy drop, individual stocks rally as demand for online meeting software increases and as people rush to buy consumer staples, and what seems like, a lifetime supply of toilet paper.
In general, tech companies are typically home to a younger, more digitally fluent work force, targeting equally digitally fluent peers. Like older generations that are more at risk of the coronavirus, and fundraising aside, traditional / consumer facing institutions seem more concerned over their survival than startups during this turbulent time – evident by the recent mass redundancies since the coronavirus.
This virus has done more than shut down the world and test the survival of age-old companies, that are forced to pivot to a tech dependent focus, like Museums that are now turning their exhibitions online. It’s forced tech adoption and made its reliance in daily life the cornerstone of the future of human connection and business success.
Paradoxically, the rapid spread of the coronavirus may contribute to the increased speed and development of many tech start-ups, particularly those operating within the healthcare industry. And with an already recent wave of globally accessible tech companies since the dotcom bubble, our reach as tech companies is far less focussed on our immediate vicinity or consumer facing scenarios, and human capital-intensive supply chains to generate revenue. We are the ‘Facebook’ generation after all, we thrive on staying connected via digital means over face to face contact.
In short, we were built for the colloquial ‘zombie’ apocalypse or COVID – 19.