"Is now the best time to start a new business venture?"
We live in historical times. Some will say that these are strange times, some will say that they are unprecedented, but there is one thing everyone can agree on: Covid-19 is a historical event, one that will be analyzed and discussed for years to come.
The pandemic also presents us with vast uncertainty. In a period where decade-long processes are reduced to months and even weeks, entire sectors transformed beyond recognition just before our eyes. The most notable example is the job sector, where many companies moved to working remotely, and leading technology companies (such as Twitter) have already announced that they will continue to work remotely in the future. The fields of education, economics, healthcare, and many more are also undergoing significant transformations.
Such a reality naturally brings with it uncertainty about the future, and requires managers, leaders, and entrepreneurs to make hard, meaningful decisions under difficult conditions. This can be seen in two, very different, sets of lenses: in one, there will be those who will warn of the risks that come with such a widespread crisis, of the expected economic recession, and of the fact that it is certainly possible that the worst is yet to come. On the other hand, there is the optimistic lens, with those who argue that the current period is affecting our lives on a historical scale, and as such, both the magnitude of the opportunities and the potential for change and innovation is immense. While voices are heard on both sides, many entrepreneurs keep wondering: Is now a good time to start a new business venture?
A matter of perspective
Entrepreneurs who choose to embark on a journey and set up a new business venture during this period will have to navigate their way, as mentioned, in a period of widespread uncertainty. Now, the more cautious voices will warn that while starting a new business, an entrepreneur looks to identify a real need. But in an ever-changing reality, it’s even harder to assess the most essential needs. For example, one of the great challenges of recent years has been the number of hours spent while commuting to and from work each day. Now, with millions of employees working remotely, a solution to this issue may be less significant than it was just a few months ago.
Also, we must not forget about economic reality, as many economies throughout the world are expected to face a massive recession. In this case, investors are likely to minimize risks as much as possible, and investing in a new business venture is always risky. In case of difficulty in raising capital, new ventures will face a hard time developing and growing, and promising ideas may remain ideas, and nothing more.
It is debatable whether these claims are pessimistic or realistic, but one thing is undisputed: an entrepreneur is, by definition, an extremely optimistic person. Long before the outbreak of the Covid-19 virus, setting up a new business venture requires a considerable amount of optimism and hope. And if we look at reality with optimistic glasses, we will discover a completely different picture.
The reason for the same uncertainty mentioned above is the very high pace of changes in so many areas of our lives. But the drastic changes bring not only challenges, but also new possibilities: in the changing reality, entrepreneurs have an unprecedented opportunity to reshape our lives, and create a tremendous impact in short periods.
We must also remember that the establishment of a new venture has always been accompanied by uncertainty. If you ever meet an entrepreneur who claims otherwise, know that he is lying. Every business venture is a journey to the unknown, and the role of the entrepreneur is to manage the various risks in the best way possible and increase the chances of success. Especially at a time when the entire market is saturated with uncertainty, the relative advantage of more mature companies over new ventures is diminishing, and entrepreneurs can take advantage of this situation to their advantage.
The effects of the crisis on the labor market may also have significant implications for new ventures. While millions of workers have moved to work remotely, the number of on-demand service providers is growing, and is expected to grow significantly further in the near future. When the market is flooded with good service providers who are available to work on ad-hoc projects, prices are also expected to fall, and entrepreneurs will be able to develop projects more affordably, without setting up large, expensive teams.
And how about the effects of the economic crisis on investors and customers? Once again, it depends on which lens you’re looking through. If we choose the optimistic glasses, we will find that even in a complex and challenging economic reality, the demand for “must-have” products remains strong, in contrast to “nice to have” products which may indeed fall sharply. Quality solutions for real needs will remain relevant, and will even enjoy an upgraded status in the eyes of investors, who will look for promising and smarter investment opportunities for the changing reality.
So what is the right answer? Is now really the right time to start a new business, or is it better to wait for a more stable period? It depends.
If you are looking for an unequivocal answer with a high degree of certainty, I am sorry to disappoint, but it does not exist, certainly not while setting up a new business venture. Entrepreneurs, by definition, are persons who see the glass half full. They recognize the risks and do everything in their power to minimize them and navigate their way through them. They also recognize the opportunities and the potential for change, and work to continually learn, adapt to the changing reality, and provide a real solution to their clients. If you are just like that, the current time brings with it not only challenges and uncertainty, but also real potential for innovation, creativity, and impact on a different scale.