Ignore anyone who tells you that there will be a return to normal economic activity after the pandemic. COVID-19 is reshaping everything about the way we exchange and interact. Businesses relying on recently extinct social norms are facing grim futures, many will close within the next two years. It’s a sad reality, but change is omnidirectional. There’s never been a better time to be an entrepreneur, because everything is new. We’ll explore a multifaceted approach to the new economy, connecting the dots of our broader circumstance to identify opportunities.
It cannot be stressed enough; everything is different now. All of society’s transaction models are now pieces to the wrong puzzle, unable to fit this space no matter how much we try. Popular news organizations telling us otherwise are attempting to recoup investments made in an old world. They deny the universal constant of change in the process.
Take to heart the vibrational impact of every event that happens in our reality. COVID-19 will not end in the next month, and even if it did, it would be too late. The ripple effect of this pandemic will have impacts ranging from local to global and will last for generations. The virus discriminates, and many in the United States are actively amplifying its effects. There will be many unforeseen consequences of COVID-19, returning to business as usual will not be one of them.
That’s not to say that there won’t be an economy anymore, we’re still going to need to transact with one another. We’ll need to make material goods, and services will be in demand. The question for every present and future entrepreneur is, how will it be different? COVID-19 is dismantling entire social, economic, and legal networks in real-time. The virus proves that the current arrangements are inadequate in times of crisis, a lesson many will never forget. New opportunities are emerging in nearly every direction, but what and where is up to you.
My entrepreneurial experience is from founding four organizations (three for-profits, one non-profit), one of which operated for eight years, grossing millions in sales before exiting. There is no information here about how to get venture funding during a pandemic—your guess is as good as mine. Instead, we’ll take a broad look at transactional relationships and society to determine better opportunities to help others.
Building any organization begins with intent. What problem are you solving? Whose lives are you making better? These questions mean more now than ever before. Needs will reshape to fit our circumstances, and people are going to assign value to things from a radically different perspective than before. These personal reorientations will directly impact your offerings and your organization. The most successful companies moving forward will be those who usher in a new era of experience, both for the consumer and the team member.
It’s important to highlight how the crisis in America is nowhere near completion. Political cowardice is all the rage, rejecting data and science in favor of wealthy donors. That’s why new organizational models will arise. As more die, fewer will be willing to pay the blood price our current economic model requires. People are thinking differently about work and wants.
Businesses are always a reflection of the time and space they occupy. When you think about your organization’s purpose, consider how it will address trends we know to be true. The pandemic will decimate small businesses because of operational models that are incompatible with public safety. Before COVID-19, the global middle class was shrinking [1], now what meager savings many of these families had will be decimated. Federally, we’re more unorganized than we’ve ever been—casting further doubt on the wellbeing of our population. The political climate is one of increasing aggression, forcing us to question the long term stability of our federal and state institutions. To compound our uncertainty, experts are unsure of when the pandemic will end [2].
There’s no successful playbook for navigating economic depression in a digital era, but certain principles of organization building will remain. One of my favorite business classics is the book Good to Great by Jim Collins. The author’s analytic approach showed us that the best leaders prioritize getting the right people on the bus. Now more than ever, having a philosophy that appeals to a people’s sense of purpose matters. That can take the form of your service, product, or profit distribution model.
The last 50 years of American business history display the same narrative taking different forms. Despite record profits, wages have remained stagnant. The average CEO in America makes about 70 times their organization’s median salary [3]. The most grotesque example being Larry Merlo, the CEO of CVS Health Corp, who made roughly 434 times the salary of the median CVS employee in 2015. COVID-19 shows us these same people left organizations entirely unprepared to deal with the crisis. How many people in the United States who were barely making ends meet are now cascading into abject poverty?
Today every entrepreneur should understand that profit distribution models tie directly to your mission. We’ve seen behind the curtain, and our past models will always abandon the general population in bad times. Consider the concerns of your potential workforce, which now will fall into two highly stratified categories of survival or self-actualization. Now is the time to develop new corporate cultures, which in turn become new social cultures. My most significant piece of advice for every aspiring entrepreneur, be genuine with yourself and your team about your intentions. Your vision will dictate your thoughts, words, and actions—everyone will know anyway.
Consider more equitable models moving forward, ones where workers financially share in company success. For the moment, our old models of what people’s economic value is has proven incorrect. Our frontline economic activity relies on some of society’s lowest earners. If coronavirus ended tomorrow, how would we treat these people moving forward? Corporations, not democracy, will make these decisions.
The entrepreneur is a prophet. They do not operate under the conditions and expectations of the moment, opting instead to give life to the new. Now more than ever, we create value by how we serve the people with whom we transact and work with. Make sharing your success as significant a passion as changing the world. New ways of work will open up more meaningful opportunities for innovation and creation.
The task of entrepreneurs comes in two primary forms today, filling community needs and imagining something new. COVID-19 is destroying many organizational and social networks, leaving ample opportunity in both directions.
When we think about the community, we can begin with the basics. There is a non-zero possibility that the pandemic will disrupt supply chains, leading to resource shortages. These will take the form of food production, material goods, medical service, and access to credit and capital.
We see this in real-time with food production. Farmers are destroying surplus crops [4] and euthanizing millions of animals [5] because we lack the federal logistics networks to move the supplies. Meanwhile, lines for food banks extend for miles across the country. People are food insecure, that’s a major problem with some straightforward solutions.
Entrepreneurs looking to fill community needs should look to localizing vertical food production. There is ample information available online on how to begin. It’s the type of work that can pull labor directly from the community, starting small and expanding your service organically. Consider talking to your community leaders; many local governments own property and may be willing to provide space and low or no cost, given the circumstances. Vertical farming is an excellent project for someone looking to build a machine that can support themselves, their team, and their community.
Staying with the theme of the community, we can identify another problem, the reduction of total potential business volume. Restaurants are a great example. It’s doubtful that it will be safe to sit in a restaurant over the next year. If you’re an aspiring entrepreneur with a talent for organizing, one opportunity is to develop and manage material purchasing cooperatives. There is no reason that every local pizza shop within a 15-mile radius of your house should be ordering supplies independently. Their struggle is that they are master pizza makers, not logistics coordinators. Consider experimental pricing models, taking a percentage of dollar savings, and offering the service as a partnership. Help businesses compete on value and cooperate on cost reduction.
Consider also the institutional needs of a society that are now suddenly ill-equipped. The education that many of us received was designed for an industrial age, imbuing ways of thinking into the general population that doesn’t fit today’s world. Teachers across the United States are struggling with distance learning—how can you make this better? What can you create to encourage the remote, cooperative based work of the future?
If you imagine something new, consider how everyday interactions are now different. How do you socialize with people now that random face to face encounters are unsafe? Personal connections soon will be between smaller, self quarantined groups with high degrees of trust. Is there a way to empower people in that process? What type of experiences might be valuable to people in these circumstances, and how can you provide them as conveniently as possible?
Consider also the nature of work. For those fortunate to be working from home, there is little incentive to ever return to an office. How does this impact commercial real estate, employee/employer relations, and industries related to self-expression? There are so many pieces to the larger puzzle that are now in question.
When exploring areas of improvement, consider the following method. Think of things you love and how COVID-19 has impacted them. Make separate flowcharts of the experience activities: one reflecting how things used to be done, another with how we must do them today. What would have to happen to make the new process as convenient and enjoyable as the first given our circumstances?
While the crisis provides an opportunity, it also brings sets of challenges that we must face together. It doesn’t matter which presidential candidate we elect between Biden or Trump; we will not see appropriate levels of federal relief to raise a people. Therefore, transactions within market verticals will shrink. Again we return to the theme of stratified economies, basic needs, and imaginative advancement.
Popular industries many of us love are no longer viable business models. People will be avoiding any sort of close contact grouping for the foreseeable future. For example, two of my favorite activities were training in Brazilian jiu-jitsu and practicing hot yoga. As someone with a new family member joining us very soon, these are two activities I am staying far away from. Yoga is easy enough to do at home, but jiu-jitsu requires close contact partners. Avoid focusing on verticals based on gathering groups as they are simply unsafe.
Any sort of product development focusing on the 65+ demographic will be challenging at this time. COVID-19 is crushing the retirement hopes of what are likely hundreds of thousands (if not millions) of Americans. We can expect luxury purchases from this demographic to decrease dramatically.
People attempting to gain influence through writing, performance, or other creative expressions will likely also suffer during these times. Everyone’s already yelling into their wells trying to be heard, so relying on these fields to be revenue generators is going to be difficult in times of strife. Creative work is always a labor of love; staying focused and perpetually improving is the key to success. Embrace the struggle for what it is and produce content.
Access to capital and credit will likely shrink for the majority of us. Banks aren’t going to lend in a depressed economy. If you aren’t willing or able to invest significant capital in starting, don’t be discouraged. Think about your venture from the perspective of a localized Amazon. How can you create incredible value, service, and convenience for people in your town, county, and state?
If you’re seeking entrepreneurial inspiration because you’re recently questioning the security of your present occupation, now is a good time. Being a successful entrepreneur is a journey of continuous learning, building the discipline and habits now will lay the foundation for success. It begins with exploration and learning, diving deep into some facet of our lives that drives your passion. The more you understand about your experienced activities before COVID-19, the better prepared you’ll be to imagine alternatives.
No matter where you are on your journey, never forget that your efforts must help people. The pandemic has exposed our economic dogma for what it is, inadequate in the face of challenge. We cannot rely on any present government options to create new rules and methods of exchange, we can only rely on ourselves. In the crisis, imagination and innovation can bring significant relief to suffering. Prioritize all of your stakeholders above yourself and codify it into practice. COVID-19 shows us that change is inevitable, now it’s up to us to choose the direction.
[1] OECD (2019), Under Pressure: The Squeezed Middleclass, OECD Publishing, Paris. https://doi.org/10.1787/689afed1-en
[2] Why it’s so hard to see into the future of Covid-19 By Brian Resnick 4/18/20 Vox https://www.vox.com/science-and-health/2020/4/10/21209961/coronavirus-models-covid-19-limitations-imhe
[3] CEO Pay: How Much Do CEOs Make Compared to Their Employees? By PayScale and Equilar https://www.payscale.com/data-packages/ceo-pay
[4] USDA seen as MIA as farmers dumped crops By Ryan McCrimmon 4/27/20 Politico https://www.politico.com/newsletters/morning-agriculture/2020/04/27/usda-seen-as-mia-as-farmers-dumped-crops-787153
[5] The closure of meatpacking plants will lead to the overcrowding of animals. The implications are horrible. By Dylan Matthews 5/4/20 Vox https://www.vox.com/2020/5/4/21243636/meat-packing-plant-supply-chain-animals-killed?utm_campaign=vox&utm_content=entry&utm_medium=social&utm_source=twitter