Prism comments on post-pandemic startups
As start-ups in the UK, having weathered the rise of the COVID-19 pandemic face a whole new economic playing field, we asked Gary David Smith, Co-founder of Prism UK (www.prism.uk.com) for his opinions on what is next for entrepreneurs post post-pandemic.
“With established businesses struggling to pivot during lockdown conditions, it is easy to think that entrepreneurs have it harder than most when it comes to recovering in 2021.”
“Statistics show that there are more than 500,000 start-ups launching in the UK each year. However, just more than 500,000 ventures fail, year-on-year, in total. This means, even pre-pandemic, small businesses were in a teetering position. The government has made steps to try and protect and promote start-ups thanks to a £1 billion fund pledged by the Chancellor in April 2020. But is this going to be enough to help small businesses tackle a ravaged economy post-COVID?#2
“Some of the statistics regarding start-ups in the UK are actually very interesting. There are various numbers that suggest investors are plunging their money into smaller ventures regardless of what’s happening in the economy, and regardless of COVID’s wider effects.”
“This is fantastic news – and there’s a possibility we can start to regrow the economy by placing our trust and interest in smaller ventures. However, there needs to be a greater sense of impetus for these companies, these entrepreneurs to kickstart their brands.”
“Simply saying ‘there’s a lot of investor interest out there’ isn’t enough. Start-ups and their chief executives need inspiration more than ever in a world that’s still recovering – and is still walking a tightrope. Start-ups by their very nature adapt very quickly to major situations and are predisposed to pivot even in pandemic times.”
“For example, there has been a clear shift in purpose for many SME founders. They are focusing more on social projects, productivity aids, environmental issues, and even purely creating wealth. The world is continuing to change in abrupt ways, and the best start-ups are rolling with these seismic global shifts.”
But – given the mass uncertainties brought about thanks to lockdown measures over the past 12 months – can a willingness to pivot ad-hoc really help entrepreneurs turn profits long-term?
“That, too, may not be enough. Post-pandemic start-ups need to think about what’s really driving them to set up at all. With the economy the way it stands, are we going to start seeing more companies fail than establish in 2021/22?”
“Some start-ups have pivoted towards post-pandemic solutions, or at least those which can support people during lockdown. Start-ups can be highly appealing to venture capitalists and investors as a result of quick-thinking innovation – however, entrepreneurs may now be concerned as to what happens next. The funding out there, but there needs to be more than just money, or the willing to be flexible, to inspire our innovators post-pandemic.”
“Through it all, the pandemic has still made business-building very difficult for entrepreneurs. There is no longer the capital-building potential available through real-world networking. Not only that, but real-world launching, in general, is restricted thanks to mass lockdown. That means ventures targeting currently hard-hit sectors have increasingly limited outreach opportunities.”
“Start-up mentalities during the pandemic may have pivoted towards helping people adapt to the colossal changes we have all had to deal with. However, there is the argument that this is simply not sustainable long-term. With uncertainty in the economy likely to persist long into the new 20s, entrepreneurs will need to find new drivers, beyond economic growth, to help weather the years to come. For example, many innovators may choose to work hard during this time to intensively research technological trends, and not just those which help to support the country during COVID.”
“Innovators need a spark, a sense of hope, to be able to ride the waves that are coming. It will be disappointing if creativity and innovation falters due to economic instability.”
While there is financial support available, entrepreneurs are almost on their own when it comes to innovating and building their businesses from the ground-up, and Smith is keen to highlight the importance of mentorship and business groups.
“We cannot underestimate the value of these groups, and networks like the Chambers of Commerce. Mentoring is critical for the next generation – both from start-up networks and financial lenders. SMEs offer a large percentage of UK employment and revenue generation. Without them, our economy would be in a very different place.”
“Our established and experienced entrepreneurs need greater encouragement to ‘dive back in’. There are still some fantastic platforms out there, post-credit crunch, which are continuing to help SME founders regain their innovative sparks.”
“I’m confident that there will still be enterprising ventures opening up in the years to come. There is little confidence out there when it comes to survival – and that certainly needs to change – but the most ingenious of entrepreneurs need to take the financial support in the here and now, and to use it to shape a truly unique growth plan.”
“It’s going to be difficult, but I wouldn’t count out strength in creativity and innovation in our most interesting companies just yet.”