One of the topics that have had my mind going in circles during covid-19 is what can help the economic disruption we are facing. Perhaps, in contrast to many, I have had a good time thinking about it, and despite there is nothing fascinating about a crisis; reading about it, seeing how the world adapted and changed to recover, definitely is.
On my research on the past economic crises, one of the things I found more interesting was the importance of startups for the recovery of turbulent times. Some of the most known companies we coexist with and use came from periods of uncertainty and have helped the world cope. Microsoft, Apple, Netflix, to name a few. Startups have been known for its high innovation performance, its adaptability to the environment, allowing fast speed scaling and ultimately generating movement in the economy and producing jobs.
Companies created during or right after a financial crisis not only opened a path for new technologies but also influenced the boundaries between humans relationships and has shown how in the inexistence of money, different assets have grained its maximum potential.
Uber and Airbnb are perhaps the most known examples of companies transforming the world after 2008. The most remarkable points on these companies are the behavioural change they influenced for the creation of what is known today as the sharing economy, and the possibility to maximize the value of fixed assets. Which refers to everything that has only one purchase transaction, it means, its monetary value stays the same regardless of the use. Eg: a car, a house.
These two unicorns generated an impact by maximizing the value of fixed assets and by providing a source of income to many. It has been said, this was a key for their success, I found out reading a blog on successful marketplaces. One of my biggest take away from this fact is the possibility to generate money by offering a product that was "free" to produce. A second important takeaway is the change of perception on what is private and what is public, for the matter of this post, understanding public as something that is shared with others, which could also be interpreted as a way of collaboration.
Before Uber and Airbnb the idea of sharing an apartment with a stranger coming for vacation, and to take a lift in the car of a random person, wasn't popular. Suddenly there are all types of solutions based on people sharing assets. The behavioural change is one of the topics that interest me the most in the creation of startups, as I believe there is where a lot of the innovation happens. Considering all the solutions entrepreneurs build are created for humanity, it makes sense to provoke new ways of perceiving the world. The above being said, I have started thinking that governments, corporations, SME's among other organizations will play an important role in the recovery of the COVID-19 disruption. However, I truly believe startups will even generate a wider impact by building new solutions, creating jobs for today and tomorrow and sparking creativity in the individuals that decide to work with them.
To finish I would like to share three ideas that come to my mind after reading about financial crises recovery, Uber and Airbnb. That are worth thinking about
1. A crisis does not recover just by a cash injection, because money doesn't generate resilience. Resilience comes from finding new business models that enable the industry to adapt by maximizing assets utility and not relying on money for all the business pipeline. For this to happen collaboration is usually required.
2. It is a fact that crises reduce cash flow. It is also true that there are assets that could reach its maximum potential, to later generate it. Considering a lockdown scenario, knowledge and skills are the most valuable assets to be distributed to create a sustainable recovery model.
3. Crises spark a sense of community in humans changing behaviours, enabling solutions that evolve the concept of collaboration. As the year's pass, it can be seen the world becomes a more collaborative place. So far, in my perspective, social media has been the biggest collaborative product. By creating income but not relying on money for the whole business pipeline.
As I mentioned before, there is nothing fascinating in a crisis apart from the fact of thinking about its recovery. If you have any questions, comments or feedback feel free to get in touch. I could spend hours talking (rambling) about this topic and the value of collaboration.