Is Now a Good Time to Partner with a Startup?
The pandemic has been a death knell for thousands of small businesses. The exact number of closures is not clear yet (and the count increases every day), but most Americans don’t need a statistic to understand the impact that Covid has had. We witness it as our favorite local restaurants, bars, shops, and more shutter. But not all small businesses are hurting.
Some startups, young companies who were in the early stages of product or service delivery when the pandemic hit, are blossoming despite (or because of?) the stress of the coronavirus and recession. Startups that were able to adapt, pivot, and shift priorities early on have experienced success where others failed. Sure, some of that success is luck – being in the right place at the right time – but some of it is a result of that agility and creativity.
- The pandemic forced the healthcare industry to adopt new or existing products and services at a faster rate than they had previously. As the care delivery model changed, so too did the needs of hospitals and clinics. Startups already in this space could fill that void. Additionally, startups that already served vulnerable populations or were able to adapt their services to serve them were able to lead the way toward better care.
- Remote work rocketed better digital interactions to the top of the priority list. Startups focused on group facilitation were positioned to take advantage.
- To quote Hempel directly, “More people want more things delivered.” Simple as that. Startups that already had this infrastructure set up were in an advantaged position as they were able to diversify their offerings and capture an increasing market.
One characteristic that many flourishing startups have is that they are in the tech industry. This includes startups that “offer virtual learning, telehealth, e-commerce, video games and streaming, and software for remote workers”, as well as those that were able to adapt and provide virtual versions of their products and services, like fitness companies. (NYTimes)
- The Tech sector is 2.8x more likely to sponsor cause-related initiatives than any other industry. (Accelerist 2020 Trend Report)
- 22 percent of startups featured on LinkedIn’s Annual Top 50 Startups List have gone public or been purchased.
- The pandemic has led to increased entrepreneurial activity and new business startups: This year, the number of applications for employer identification numbers is 3.2 million so far, up from 2.7 million in 2019. (Wall Street Journal)
- Applications from firms that employ other workers – not just sole proprietorships or gig workers – are up 12 percent over 2019.
Impact on Partnerships
Startups are not typically on an organization’s radar until they’re on everyone’s radar. Once Google became Google and Amazon became Amazon, the advantages of partnering with them became clear. But there is value in finding startups before they hit the big-time and building out a relationship with them.
Unlike Fortune 500 companies or other well-established and rigid corporations, some startups are entering Q4 in a growth stage. They may not see themselves as “Corporate,” but Corporate Social Responsibility is still a necessity for them. A partnership with your organization may be just what they need to round out their year and their image. It’s a win-win for everyone!