As the challenges associated with the coronavirus pandemic mount, there is no shortage of innovative entrepreneurs who have stepped up to help. During March and April 2020 alone, virtual Covid-19 hackathons drew in tens of thousands of participants from 175 countries.
Is your innovation is addressing a long-term problem.
The best innovations are created in response to specific, urgent, and sizeable problems. In some ways, the Covid-19 crisis has made our most urgent problems and their potential solutions more obvious.
For example: Health care providers needed masks; production facilities were idle; workers were furloughed and needed jobs. A social enterprise could address all three of these urgent problems simultaneously: Train workers to make masks in underused production facilities for health care providers.
But will this cluster of problems still need your solution three to five years from now?
Some coronavirus-inspired entrepreneurs are building on existing trends that have been amplified and accelerated by the pandemic, such as the explosive growth in telehealth, remote patient monitoring and the use of AI in health care.
In order to determine whether your new product or service is addressing a long-term or short-term problem, I recommend that entrepreneurs start by looking to the past. Construct a market-opportunity analysis using data from 2019 and earlier. Was the problem you are addressing now a problem then? And, if so, how big was it? Next, list what specifically changed with the emergence of Covid-19 that created or amplified this problem and the need for your innovation.
For example, the need to care for patients from a distance, a problem solved by telehealth and remote-patient monitoring, certainly existed prior 2020. What changed with Covid-19 were the widespread stay-at-home orders, more widely available video and home-based technologies and, in the case of telehealth, changes in regulations and reimbursement, which, together, have led to a tremendous demand for these services.
Identify your long-term market.
The next step is projecting whether there will be a large, passionate market for your product or service in a post-Covid future. Research conducted by CB Insights prior to the pandemic found that a lack of market demand was the most common reason for failed startups’ demise, with 42% of companies citing it as a contributing cause.
User Experience design has taught us that a key to building a lasting business is having a deep understanding of who your customers are and how your product or service fits into their world.
As a Covid-19 inspired entrepreneur, ask yourself two questions: Are you delivering an innovation that your customers are passionate about? And will there be a large enough number of these passionate customers to grow a business once coronavirus is under control?
Proactively pivot, if needed.
If you determine that your current target market may not be large enough in a post-Covid future, you may need to pivot, like we did.
For the first 3 years of our company, we were a fan engagement app for live events (sporting events and concerts). Then we ran into a technical roadblock as we moved into larger and larger venues (the wifi and data bandwidth was not capable of handling our event activations). Then we pivoted into schools where we engaged parents with teachers to create positive outcomes for their students, our company took off and the rest as they say was history.
If it’s your turn for a strategic pivot, do whatever you can to pivot early, proactively, and thoughtfully. There are ample stories in the media these days of startups that are pivoting — but are doing so reactively in a frantic scramble for survival.
Map your business model.
Many of today’s Covid-19 inspired innovations are being given away for free, or are supported by donations, as is appropriate during an emergency. The leaders of these startups should be aware that contributions to non-profit organizations that are not Covid-19 centric are way down. Maintaining a donation-exclusive organization over the long-run in the face of today’s economic circumstances will likely be difficult.Covid-19 inspired innovators should consider revenue models native to the field of social entrepreneurship. Social enterprises have a dual mission of social impact and financial growth and have developed an array of business models to achieve these parallel goals.
Today’s entrepreneurs who are working on mapping their business model should also look to the past, when other economic disruptions similarly forced many companies to rethink their businesses.
I suggest today’s entrepreneurs focus their company’s customer value proposition, profit formula, and the key resources and processes needed to deliver the offering as they navigate a future that is likely to demand novel solutions for some time to come.
The Covid-19 pandemic has clearly confirmed the maxim that crisis breeds innovation and opportunity.
It is unclear at this time which of the tens of thousands of Covid-19 inspired entrepreneurs are creating products and services that will succeed in the long-term, but by going through these steps, more of today’s innovations will be the ones that people are using years and decades from now.