How To Find The Opportunities In The Coronavirus Crisis
By Ian Frost | 25 March 2020
By Ian Frost | 25 March 2020
Everyone is losing their freaking mind right now over the rapid changes to society and increasingly pessimistic sentiment in the market caused by COVID-19. And rightly so, with a vast number of businesses already running on razor thin margins being forced to close for an uncertain amount of time.
Without a dramatic reversal of the current trend we are likely to face huge increases in unemployment and secondary shocks to the economy.
We have felt this impact ourselves, with three proposals being cancelled directly as a result of COVID-19 impacts. As a small business this is not easy to absorb.
But it is not all doom and gloom. For most businesses, there is a strong path forward and even an opportunity in this crisis. Never before have so many been forced to embrace remote work and learn new strategies for reaching their customers online. Social media usage is spiking, advertising costs are dropping, remote services, financial advisory and e-commerce are all booming.
To underscore the point, Amazon had to suspend advertising to acquire new customers and delay delivery of non-essential goods because they cannot handle the volume of orders threatening to crash their websites and warehouse operations.
If there is one thing we have learned from history, is that humans are incredibly adaptable to their environment. We’ve survived extremely difficult events, such as the Toba Supervolcano which reduced humanity to less than 10,000 individuals.
The current crisis pales in comparison. People will still need to buy things, pay their bills and run their businesses. They will find ways to continue operations because many simply have no choice. While it may involve trading off long term growth because of inflation, governments around the world are doing what they can to help people survive this shock to their income by directly stimulating small business and individuals.
This may even be the trigger that introduces a form of Universal Basic Income (UBI) which is being debated as a serious policy option to handle the crisis. The impact that a policy like UBI has on people’s relationship to work, and their appetite to start new ventures, is unknown. However there are many who believe it would trigger a new renaissance in start up businesses.
I am a massive fan of first principles thinking and the five whys. The great philosophers of antiquity all understood that much of our knowledge is built upon assumptions deeply ingrained in our psyche. We learn these assumptions from our interactions with others who in turn have their own biases and incorrect assumptions influencing what they “know” to be true.
To truly formulate logical strategy, we must strip back those assumptions until only pure and objective facts remain. And only then can we begin to construct from those objective facts a strategy to approach our problems.
Start with the most basic facts about yourself and the value you can provide to others.
If you can find a problem that you can solve, which is also the answer to all three questions, you have the most important starting point for any valuable business.
These questions are relevant because:
A “red ocean” refers to a market saturated with players where they aggressively compete on price or minor service differences. The most powerful way to build a highly successful business is to apply the blue ocean framework to generate ideas for how existing business models can be disrupted to create a brand new “blue ocean” market that no longer has direct competitors.
You can still always compete with an existing market in a red ocean, but if you manage to create an entirely new blue ocean market, the potential upside is extreme lucrative. Cirque du Soleil is one of the best examples of successful blue ocean strategy. They removed many of the common, expensive elements to circuses (such as animal acts) in order to focus on being the best in the world at a specific element that is easily portable (acrobatics) and in doing so created a completely different business model and market.
The key behind adapting to any major change is to remain realistic, open minded and able to react fast to opportunities as they present themselves.
If you have a service business that can be delivered online, you’re extremely fortunate. While you may be experiencing the pain of budgets being pulled and prospects suddenly going cold, you will be able to continue to operate.
And if you can adapt successfully to the new reality of the Internet being the primary method of interaction with your customers, you can even thrive as people flock to try new services and ways of working remotely.
Even if you don’t have a way to operate through this shut down, then focus on preparing for the inevitable recovery. Be ready with new campaigns to spring into action as soon as you are able to to capture new market share. Remember, people will be more ready than ever before to utilise services and products they haven’t been able to for weeks (eg barbers, gyms, etc).
The remote working trend is already here now, and if you think you are going to suffer long term consequences of this pandemic then you need to start building your fully online business right now to execute a pivot.
Just remember to keep positive, don’t let the future uncertainty affect your productivity and your ability to be open minded to new opportunities.
It’s up to you to create a path forward for yourself and the people who rely on you.
Feel free to hit me up for a chat if you want any support or advice on how to get started.