The last year has been challenging for a lot of businesses, large and small.
Companies all over the world have had to adapt to changed circumstances and consumer behaviours, and find opportunities in times of crisis. This required lots of innovation, creativity and the development of new business models.
We asked Founder and CEO at MarsBased and Barcelona Director at Startup Grind, Àlex Rodríguez Bacardit, what business leaders had told him about the strategies they had been adopting for survival during the pandemic.
“Many startups have cut costs, some obvious ones (office space, business travel) and some more drastic, like furloughing part of their workforce or killing unnecessary projects or non-profitable business lines. In general, I think that we all understood that this could go for a long time and we all prepared for a forced hibernation, just in case. One strategy that directly affected us is that pretty much every company using service providers renegotiated the rates and conditions of their contract, maybe to have lower prices or more flexible payment schedules. Others have decided to part ways with many providers and have only a big one covering them on all fronts, while others have outsourced part of the stuff that they were doing internally to save on cost and externalise the risk of new hires in uncertain times.”
In this blog post, we’ll dive into some common business strategies that companies have adopted in order to survive and thrive during the pandemic. Furthermore, we’ll look at case studies of Spanish businesses that have successfully adopted these strategies.
1. Investing in innovation
In order to reduce the spread of COVID-19, countries around the world have enforced strict lockdowns, forcing employees in various sectors to work from home. This has reinvented the way we work, resulting in a greater reliance on technology.
As a result, investment in technological innovation has increased dramatically. In order to stay afloat, companies have had to ensure that their employees are able to continue working from home, and their services can be bought or accessed online. This has meant the development of new software, digital systems and communication methods.
Case study: Oliva
One Spanish startup that has seen an opportunity for innovation is Oliva. The digital healthcare startup offers affordable, quality and personalised online therapy sessions.
Going into lockdown, founders Javier Suárez and Sancar Sahin realised that patients would not be able to access in-person therapy sessions. Noticing that mental health was being affected as a direct result of mass lockdown, they saw an opportunity to innovate therapy services.
They got to work developing their digital services and capabilities to provide their customers with online therapy sessions. The company will continue to offer both in-person and online therapy moving forward.
2. Taking businesses online
The pandemic has seen the closure of all non-essential businesses. This includes theatres, cinemas, museums and shops. As a result, companies that had never considered going online were suddenly forced to digitalise their businesses.
With fewer people able to leave their homes to spend money on goods and entertainment, consumer habits have changed. Online shopping – ecommerce – has become the main method of purchasing for consumers globally.
Yet, according to a GoDaddy study, only 7% of Spanish small businesses have a website that acts as a sales channel. This means that many businesses in Spain are having to go digital and create ecommerce websites in order to survive.
Case study: MYBARRIO
Founded in Barcelona in 2016, MYBARRIO is one of Spain’s largest creative communities. They select the works of artists, designers and creators to sell via their online shop and hold an annual pop-up market to sell these products.
To ensure the company’s survival over the pandemic and support the creators involved, founder Hortense Giraud decided to move the market online.
The project called MYBARRIO Online #EnCasa allowed visitors free access to an interactive, online design festival. Guests were also able to purchase products online. This decision has ensured the survival of the company and paved the way for future online markets.
3. Responding to demands in logistics
Developments in ecommerce are making it much easier and quicker to shop online. However, products still need to be shipped to people’s homes using lorries, trains, airplanes and ships.
When events like lockdowns and border closures disrupt supply chains and delay shipping, consumers – who, thanks to companies like Amazon, are used to receiving packages within 24 hours – are left waiting for their orders to arrive.
The increase in ecommerce over the last year has resulted in a huge need for quick and reliable logistics. Smaller companies, in particular, have felt the pressure to quickly adapt to logistical demands to ensure their survival through the pandemic.
Case study: Glovo
The Barcelona-based startup Glovo is a hugely successful on-demand delivery platform. The company allows customers to get the best products in their city fast by connecting users, businesses and couriers.
However, the spike in online shopping and accompanied demand on logistics over the past year has put pressure on Glovo. In order to cope with the new wave of online consumption, known as Q-commerce (quick commerce), the company has started to establish “dark stores”, or warehouses, in cities where they operate.
These stores facilitate a speedy and efficient “click-and-collect” service for customers, reducing the demand on the company’s logistics. This is a trend that is predicted to continue long after the pandemic has passed.
4. Changing the business model
The pandemic has shown businesses across all industries that they need to have practices in place that allow them to cope with unexpected crises. In order to survive, businesses must be resilient, adaptive and creative.
So what makes a company resilient? One solution is agility. Agile business modelling is a new business strategy gaining momentum as a result of the pandemic.
Business agility is an organisation’s capability to adapt quickly, respond rapidly, be creative, lead change and maintain its competitive advantage when faced with difficult problems and uncertainty.
If a business can remain agile throughout these periods, then its chances of success and survival are much higher.
Case study: Badi
One Barcelona-based company that’s reshaping its business model is Badi. The rental startup helps people to find their perfect flatmates.
As you might expect, the long-term rental sector has been greatly affected by the pandemic. Badi is generally used by students, young professionals and expats. Yet, covid restrictions have forced many people to move back in with parents or return to their home countries. As a result, there has been a sharp decline in the amount of people using housing apps such as Badi.
Speaking to Startup Grind, founder and CEO Carlos Pierre explained that he was responding to this crisis with a reshaping of Badi’s business model. He identified that, due to the pandemic, more people, especially digital nomads, are looking for fluidity in their living arrangements. In such uncertain times, people want more freedom, more security and more flexibility with their rental contracts.
Recognising this trend, Badi have responded by offering customers shorter contract options and more security when verifying landlords. This has ensured that it has remained key players in this sector.
5. Rebranding the company image
With fewer resources to fall back on and a smaller network of customers, small businesses have suffered from the pandemic more than larger ones. One strategy for keeping up with the larger companies is rebranding.
Changing the company image or offering new services that respond to new trends is a great way for companies to distinguish themselves from the competition.
Rebranding is a way for companies to use psychological tactics to their advantage. This is because it helps to change customers’ perceptions of the brand and encourages them to engage with it.
Case study: TravelPerk
The travel industry has experienced a major crisis as a result of the pandemic. Spanish startup TravelPerk, which offers a corporate travel management platform to help companies book business trips, is no exception.
As a result of the pandemic, there has been an increase in demand for more flexibility, refunds for cancellations and more efficiency in the booking process. In response, TravelPerk – led by founders Avi Meir, Javier Suarez and Ron Levin – has rebranded its image to show that it’s committed to caring for its customers, offering safe, secure, efficient and sustainable travel.
The company has also introduced FlexiPerk, a new service which provides flexible travel bookings. As a result, TravelPerk has maintained its competitive advantage in business travel.
Furthermore, the startup is expecting travel to recover quickly as vaccines are rolled out around the world. TravelPerk wants to be at the forefront of the industry when business travel kicks off again.