Is this COVID-19 situation the new norm, and how should you respond to keep your business strong now and into the future?
The world changes as we evolve. The perception that those changes are occurring faster is not novel, and most of us have learned to expect disruptive products, services and platforms that enter our lives to constantly shift behaviors accordingly.
Access to technology is exponentially global, and we have accepted that today’s status quo is unlikely to subside for long. The expectation is that user’s feedback is heard almost on-demand, improvements are made instantly, and things “will work better”.
Yet, except for rare exceptions, that evolution isn’t driven by macro changes. This time, however, it is very different. There’s something very real happening we cannot ignore that will, unfortunately, change – faster than ever – businesses, basic behaviors, market dynamics, and the world.
The point of this article is not to make judgments on responses to COVID-19, estimate its peak, or project when things “will get back to normal”. And sadly, until then, this will directly or indirectly impact everyone, and millions will struggle dealing with a variety of losses. There are other good articles discussing those issues. (ex: The Conference Board)
For this article, the objective is to address how various types of businesses can react and adjust to the current COVID-19 situation successfully.
How We Got Here
Before getting to the impact of the current situation, there are some analogies that help us understand how we got here so fast, and what created the current environment backdrop. Ironically, what we’ve seen occur in response to the COVID-19 situation also tends to happen in many tech projects. There are three identifiable factors that contributed to where we now find ourselves.
1. High-level Vision Misalignment
What we’ve witnessed in the handling of the COVID-19 situation is also very common within a company when there is no clear alignment regarding what the end state is. If one stakeholder thinks we’ll get to X and another stakeholder feels we’ll get to Y, we have a problem. With our clients, we try to align that end state vision in our Product Strategy sessions on day one. It is the basis for any good solution. In regard to the COVID-19 situation, globally that vision is still not aligned on what the end state is.
2. Multiple Decision Makers
This is (painfully) obvious. Without an “overriding” power or entity, the decision making power is left in the hands of many folks that have different beliefs, agendas and motivations; and they lack the full knowledge to make such decisions. In any project, this would be the first red flag. In reality, this goes much deeper than a “mayor” vs “governor” lockdown decision. We had school deans, theatre owners, small business owners, district leads, health officials, property managers, sports commissioners, politicians and a long list of “decision makers” on when and how to react. It creates not just confusion but leads to frustrating “timeline” adjustments – always. A more coordinated response leads to better results.
3. Decision Waterfall
As a result of the first two factors, we are seeing what happens in a project when a client is shifting requirements and requesting product changes based on others’ input, with no reasoning. Changes can be a good thing, but only if they are substantiated. Let’s assume the end state of the COVID-19 situation to be “lockdown”. But before we get to that end state, a lot of unplanned decisions occur:
- first have an infected case, then
- email people reminding to wash their hands, then
- announce we’re cleaning, then
- announce we’re closing for some people, then
- we’re closing for some hours, and finally
- we’re closing.
This happened, is happening, to every business. And decision makers are looking at industry peers, other business leaders, or to public figures and making adjustments to decisions in real-time. This again, leads to “timeline” adjustments, confusion, inefficiencies and ultimately poorer results.
What Is Your Situational Business Type?
There is much speculation and varied opinions on what the impact of this COVID-19 situation will ultimately have. Whether you agree or not with the final impact of the virus, we all now know it’s real, it has or will lead to a lockdown, and that eventually – after there’s containment – we will slowly go back to a pre-COVID-19 world.
But it won’t be a replica of what it was. A post-COVID-19 world will be significantly impacted in the way businesses interact with their customers and vice-versa. Those are the underlying assumptions I’m making – there is a “Quarantine Period” and a “Recovery State Period”. And the assumptions should hold for a variety of timelines, which each business leader can ultimately impact as a result of their actions.
So, what happens to various businesses? They can be categorized into different groups we call Situational Business Types.
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The Lucky Ones
Existing businesses that will thrive in Quarantine
This category is very straight forward, but maybe there’s some edge cases around industries. In essence, more time at home means more consumption of gaming, entertainment, news, delivery services etc. But they’re not all the same.
The gaming argument is valid. I don’t expect a shift in app consumption. Weekday daytimes will not mirror nighttime or weekends (yes, people will be at home, but a large majority will still be working during the day). But games will obviously thrive. People will play more. One of our clients is in the process of launching a game which is built for multiple sessions per day vs longer sessions, and those types of games will likely see a bigger uptick, since people at home “bored” will want variety and constant change. Expect casual games targeting broader demographics to increase faster than niche or hardcore games.
TVs will be on more often and for longer periods, but the entertainment businesses outcome will vary. For example, Netflix is a Lucky One, but their business is affected in an interesting way. People will be watching more shows. But this situational change is not a direct reflection of their north star purpose. In theory, more hours watched means more retention and potentially new users, which means more money for new content, etc. This might be an example where a business’s north star gets adjusted. Where’s the risk? For starters, Netflix won’t be creating more content until we get to a Recovery State. I’m not saying a Netflix user will run out of shows to watch – it’s a very extensive catalog. But with production halted across shows, content will be consumed and not “replenished” immediately.
This may drive their customers to try other content providers – that “variety” need. And, with children at home, some might venture to more kid-friendly subscriptions (e.g. Disney+). In Recovery State mode, that might actually create some tough cancelation decisions and outcomes.
Our client, Breaker, is a specialized content provider that would be an example of a business that could thrive for being “smaller” in that space. Smaller gaming and entertainment apps have a massive opportunity to invest some user acquisition marketing dollars on what should be a much lower cost per impressions world.
Remote Workforce Management, Financial Planning
By the time Recovery Period arrives, we will probably know of more apps and companies we didn’t before Quarantine. This list will be surprisingly long. Other significant, more obvious opportunities will exponentially increase for businesses related to remote workforce management or financial planning tools.
The Easy Pivoters
Existing businesses that can shift in Quarantine
This will be the main conversation had at multiple management meetings across the World. How easily can we shift our business model in the “current” Quarantine state? Some will be more obvious than others.
For example, we have been working with a client that is building a Donation Platform for multiple charities. The model shift to help just Coronavirus’ impacted individuals, families, communities or front-line businesses like healthcare providers, would require minor tech changes.
Another client of ours in the dating space, Challenger, is thinking how to balance the expected higher client engagement while re-prioritizing features. In this case, since there’s no “in person dating” possible, we’re developing new features that would not only further the product story matrix but can also keep the product’s unique value proposition in the Recovery State. This includes queuing in-person dates, video calling for matches, smaller challenges to play, etc.
Social Apps are very interesting. For those that rely on broader content, they might be in the Lucky Ones category. But for those that rely on, for example, more outdoor content (e.g. sports related social apps), they would need to consider new features to ensure engagement, like “remembering” previous highlights, top lists, upvoting or user generated content.
Retail and Others
For some, it might be to actually just increase their scalability needs which, by itself, can be a large pivot in terms of tech infrastructure and development allocation. For some retail heavier businesses, this might be the difference maker. The more those businesses are (tech wise) prepared to still address their client’s needs (e.g. delivery for restaurants, or gyms with online videos subscriptions) the less immediate topline impact they’ll see. In fact, they might even realize this can be a much more profitable longer-term strategy to their traditional model.
Others will struggle to just keep their customers. For those it might be the time to think how they can leverage tech to address their current workforce or client’s needs during the Quarantine period.
The Quick Wins
New business that will thrive in Quarantine
This is more difficult because there’s not much time to “build” for Quarantine. So, a lot of these will either be smaller tech projects or “create my YouTube/ TikTok channel”. We might see a surging of ideas that leverage existing 3rd party platforms and build something aimed to serve the needs of users that typically rely on the “Easy Pivoters” services or products that might not be adjusting quicker. This has been something happening across Europe, where several new companies (mostly around delivery of products and goods) have surfaced on WhatsApp.
We might also see a trend amongst companies that are not comfortable with pivoting their model. Especially for companies that offer a variety of products or services, they might be tempted to push internal innovation, and outsource or incubate smaller ideas that can quickly be brought to market.
New businesses that can help in Quarantine
This will be the vast majority of “new” businesses that will come up. This is also where a lot of tech businesses with resources on the bench can contribute. These can range from very simple to much more complicated engagements. Examples include toilet paper finder, virus stats sites, ventilator trackers, essential goods distribution, stimulus packages checklists, symptoms finders, and so on.
Some of them will be “Partial Pivoters”, specially at the enterprise level (e.g. 3M or GE) aiming to shift their production capacity more towards extremely needed hospital supplies at this time.
New businesses that are built around the Quarantine impact on Recovery State
We will see several types of businesses arising in markets that will in theory be ideal to take advantage of a Recovery State. A perfect example would be cloud kitchens. Assuming unemployment is higher, this could lead people to try new income sources like couriering or home-based businesses. Many “home chefs” have the skills but not the capital to open a restaurant.
Society wise, while we might see an initial spike in dining out, social “less distancing” will likely still take a while and take-outs will likely do better. With more retail space available, and at a better cost, the real estate side of the equation in this business makes even more sense.
This is where strategizing now and focusing on understanding market dynamics, macroeconomics signs, research and user journeys could set up several businesses for immediate success in a Recovery State.
Existing businesses that can thrive in Recovery State
As mentioned for Ideators, the world will be scared for a while and we could assume social distancing will still occur. If that’s the case, you would have services like public transportation that would be impacted for longer. Commuters would use less buses and subways. Scooter riding services could see an immediate uptick.
For these businesses, the key is to survive now, but also plan almost for a “relaunch”. This could be immediate marketing outreach and internal strategies for how to prepare for a world with less competitors or competitors that will take longer to recover.
The Hard Pivoters
Existing businesses that “need” to change for Recovery State
Some things will never be the same. Events will take a while to pick up and will be limited in a variety of ways. So, how does a company like StubHub (or one of our clients that is in the ticketing space) adjust? One option is to leverage their current technology and apply it to a different vertical market business that can utilize their technology and processes now. This would only require a simple frontend, UI, branding, marketing shift, but it would require ongoing business development coordination to start now.
New businesses in an impacted market that can thrive in Recovery State
The good news for new businesses in impacted markets is that they weren’t “live” during the Quarantine State. For example, we have been working with a client in the online traveling space. While the market is heavily impacted, for those with no fixed costs during this time, they can see this as an opportunity to have immediate access to a larger talent pool. They can also adjust their tech roadmap, assuming less competition post launch, to products that are much more suited to customers’ new types of needs. Meanwhile, surviving incumbents are trying to pivot and adjust to different habits.
What to Do Now
As a business owner, you are no doubt diligently trying to figure out what’s the right action to take now. Based on the Situational Business Type you are, I suggest taking the associated action:
The Lucky Ones
Type: Existing businesses that will thrive in Quarantine
Situation: Short timeline to optimize the uptick in business
Action: Optimize your current user flows. Utilize more peoplepower to go through your backlog quicker. Enhance marketing efforts.
The Easy Pivoters
Type: Existing businesses that can shift in Quarantine
Situation: Adjust your business now – capture market share, build tech for future
Action: Quickly strategize. Start developing fast. Enhance marketing.
The Quick Wins
Type: New business that will thrive in Quarantine
Situation: Get to market quickly.
Action: Take on smaller projects. Utilize existing 3rd party frameworks.
Type: New businesses that can help in Quarantine
Situation: New and “Partial Pivoters” repurposing resources helping with the current situation.
Action: Pro bono work. Give your resources X hours to work on helping.
Resource: Startups Fighting to Flatten the COVID-19 Curve
Type: New businesses that are built around the Quarantine impact on Recovery State
Situation: Preparing now to emerge soon.
Action: Research, Strategize, build prototype. Raise funds. Move quickly to develop your product.
Type: Existing businesses that can thrive in Recovery State
Situation: Survive for now. “Relaunch” when the time is right.
Action: Strategize and plan. Make changes accordingly. Adjust marketing efforts.
The Hard Pivoters
Type: Existing businesses that “need” to change for Recovery State
Situation: Make changes now needed to succeed in the Recover State.
Action: Strategize. Repurpose technology.
Type: New businesses in an impacted market that can thrive in Recovery State
Situation: Need to be ready to go to market soon with the appropriate offering.
Action: Develop technology.
No matter what your Situational Business Type is, during these uncertain times one thing is for certain. Non-action is not an option. If you need help, reach out. Although it remains a competitive environment, this time around we’re all in it together.