As COVID spawns new ways of doing biz, is it a good time to be an entrepreneur?

Capitalizing on shifting trends

As COVID-19 brought wellness to the forefront and consumer habits started to change, businesses in the plant-based food space began seeing growing interest from both investors and the public.

Karana, a Singapore-based meat alternatives startup, for example, recently closed a seed funding round and was on the cusp of launching its products into restaurants and food services when the city-state went into lockdown.

As Karana co-founder and Co-CEO Blair Crichton explains, the company's initial response was to focus on "reducing cash burn, reigning in costs and battening down the hatches" while they waited to see what would play out.

At the same time, however, Crichton said the pandemic was "in some ways a blessing in disguise" as it allowed his team to reassess their plans and pivot to a different business model.

While 2020 wasn't a great time to be doing offline product launches and events, Karana was able to use the lockdown to shift their focus to developing a retail offering－something which could have been more difficult to do had they already been out in the market.

As Crichton's story suggests, periods of crisis often create conditions under which new innovations can, and must, emerge. Moreover, early-stage startups may be well-positioned to spot and react to new trends and help build a new normal.

Humanity's biggest wake-up call

For venture capital firm Gobi Partners' Founding Partner Thomas Tsao, while the volume of new investments the firm engaged in dropped during 2020, the number of follow-on investments it conducted for existing companies actually increased.

"A crisis period is really when venture capital firms earn their stripes," Tsao says of the need to offer support for startups.

Moving beyond basic survival, the pandemic has also served as what Tsao calls "humanity's biggest wake-up call". Not only has it proven how interdependent we all are, it has also accelerated a broader movement toward sustainable investing.

Moreover, Tsao added, with vaccine rollouts fueling hopes for a global economic bounce-back, environmental, social and corporate governance (ESG) is something VC firms will need to start building into everything they do.

"It is very important for VCs to take responsibility now, not only to make as much money as they can, but to make that money in a sustainable way that really has a positive impact," he said.

Despite, or perhaps because of, the turmoil caused by COVID-19, many in China in particular have been confident about expanding their businesses and trying new things.

"People are figuring out different ways of working with each other," says INCE Capital Founding Partner JP Gan.

As with any major disruption, shifts in people's lifestyles and working habits will create new opportunities and affect big changes.

"In the next few years, it will have a huge impact on business culture and business practices," Gan said.

Nevertheless, even with an available money supply and the active support of VC firms, leaping into the world of launching a self-owned business admittedly isn't for everyone.

"Being an entrepreneur is a long, lonely journey," he said.

Indeed, Gan conceded that many people working for big corporations were not ready or willing to quit their jobs to become entrepreneurs in the middle of the pandemic.

"It was not an intelligent thing to do to leave your high-paying job while working at home," he says.

Big problems, new realities

As economies rebuild and new realities become apparent, there will, of course, be both winners and losers. At the same time, as people begin future-proofing their businesses, there is an opportunity to think not only about creating economic value, but also about how to do so in a sustainable way.

Ultimately, there are big problems out there which need solving and now may be the time for entrepreneurs to step up and take advantage of this great wake-up call.

The writer is an associate dean of China Europe International Business School.

The views don't necessarily reflect those of China Daily.