How tech startups survived the pandemic
Fledgling firms have stepped in to cater for extraordinary demand for products and services
The coronavirus pandemic has been an extremely challenging time for the business world, with countless industries suffering from stalled growth and economies worldwide falling into recession.
But unlike industries such as hospitality and tourism, which were heavily disrupted by the pandemic, the technology sector grew exponentially as people relied on devices and software for working, learning, and staying entertained in their homes after lockdown restrictions imposed in early 2020.
In fact, many new startups launched throughout the coronavirus pandemic as they looked to capitalise on the massive demand for technology and solve different challenges caused by this crisis. Last year, nearly 20,000 tech startups were founded in the UK alone.
A helping hand
While businesses of all sizes and industries have felt the dire economic effects of the coronavirus pandemic one way or another, startups were particularly vulnerable. However, thanks to support from across the private and public sectors, more established startups were able to stay afloat while new ones were born.
Simon Philips, CEO of scale-up investor ScaleUp Capital, says: “I have been delighted to see the support governments, private investors and banks have given startups in the UK during the pandemic. Not only that, but even more businesses were launched during this time, which is a true testament to that support and starting grounds that the UK flourishes on.”
Phillips explains that when governments implemented stay-at-home restrictions and social distancing measures following the coronavirus outbreak last year, many businesses had to reorganise their company structures overnight in order to survive. For most, this meant closing their offices and enforcing remote working policies.
However, Phillips admits that increased demand for digital services in the pandemic meant that many tech startups could thrive. He gives the example of ScaleUp Capital portfolio company Digital Theatre, which has developed a live theatre streaming platform that offers access to productions from the likes of Shakespeare's Globe, The Almeida Theatre, and The Old Vic.
He explains that Digital Theatre saw the uptake of its platform sky-rocket when theatre venues closed during the pandemic, adding: “In many ways, the pandemic has been a catalyst to fuel increased use of digital tools to carry out daily tasks, thus benefiting startups offering such services.”
Relying on agility to survive
Despite the coronavirus pandemic presenting unique challenges for businesses, some people believe it acted as a catalyst for innovation.
Carly Morris, head of Geovation at Ordnance Survey (OS), says: “Many of the startups we support at OS’ geospatial incubator Geovation had to pivot or adapt their business models because of the pandemic. In many cases they found a new way to succeed.”
She explains that a number of the tech startups participating in the OS-run Geovation programme created new products or modified existing ones in a bid to find an answer to different problems brought about by the pandemic.
“For example, CoronaFriend, a community tool that can map whether a street with people self-isolating has been assisted or partially assisted, was set up within two weeks,” says Morris. “Or DronePrep, which pivoted from being a digital map showing suitable locations for drone use for pilots and landowners across Great Britain to be used to facilitate drone deliveries of PPE equipment for the NHS.
Her view is that startups capable of innovating during a turbulent time like the coronavirus pandemic will be the most successful future businesses. She tells IT Pro: “Ultimately the most successful businesses over the coming years will be those who never stopped innovating, even in the face of huge challenges, as this will allow them to overtake the pace of their competitors.”
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Ben Ramsden, head of SME at PayPal, agrees that tech startups have found enormous success in the pandemic and that they have an even brighter future once the crisis finally subsides. He tells IT Pro: “According to PayPal’s Business of Change: Recovery & Rebuild report, 65% of SMBs in England plan to update their tech to engage in a digital-first world. This presents an unprecedented opportunity for B2B tech startups, who have seen a surge of investment and will continue to do so as business in general looks to invest in tech as a matter of priority.
“While the pandemic forced the UK’s SMBs to show remarkable resilience, tech startups have increasing cause for optimism after the pandemic has levelled the playing field with trading opportunities that were previously reserved to their large enterprise competitors. This is how many tech startups have thrived during the pandemic and will continue to do so.”
Staying relevant post-pandemic
The overnight transition from people commuting to an office for work to doing their jobs from home forced drastic changes in how businesses operate, says Sam Liang, CEO and co-founder of AI-powered voice-to-text transcription service Otter.ai.
Although this change caught many people by surprise, Liang explains it provided “a real opportunity to take our core product – capturing voice conversations and generating real-time meeting notes – and create a more integrated meeting experience, for those working entirely remotely and now for those working in a more hybrid work model.”
For example, the firm launched Live Notes for Google Meet and Otter Assistant for Zoom – another technology company that has thrived thanks to the rise of remote working in the coronavirus pandemic.
While the remote working revolution seen throughout the pandemic resulted in the rapid growth of technology startups like Otter.ai, Liang is optimistic that his company will continue to expand even as people begin to return to physical working environments following the easing of lockdown restrictions.
“We’ve seen significant growth and adoption of Otter.ai during the pandemic, and this has continued as professionals increasingly return to the office and work in hybrid models. Our innovations directly respond to the needs these professionals have and fit every work environment,” he adds.
Ross McCaw, CEO of OurPeople, believes that the coronavirus pandemic allowed tech startups to advance rapidly despite the many challenges it also created. “Agile, innovative tech companies had to speed up existing development plans, or develop entirely new products, to plug technological holes across industries, helping organisations to better cope with the demands of a global crisis,” he says.
“As millions of people were forced to work from home, they effectively became deskless workers overnight. Businesses were quick to deploy communications technology to better connect teams used to working in a shared space together, whilst also combatting information overload and update fatigue.”
Over the past year, OurPeople has seen the use of its deskless communication technology grow by 150%. McCaw says: “The variety of client base quickly expanded and our technological capabilities broadened to cater to these new industries, such as law and insurance.”
At the same time, OurPeople released a free version of its B2B communications platform for NHS frontline workers “in an effort to help these vital teams feel safer, better connected and accounted for as individuals”, McCaw says.
In many different ways, technology startups have played a vital role during the coronavirus pandemic. Ultimately, their innovations allowed people to go about their daily lives as normally as possible when coronavirus broke out last year. As such, the increased usage of devices and software throughout the pandemic has resulted in massive growth across the tech industry – and tech startups have thrived because of it.
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