Starting a business during times of crisis
This is a post about starting or pivoting a business during the coronavirus crisis - it includes three examples of how actual businesses are pivoting to adapt to the situation, and a playbook for identifying your own opportunities. If you want, you can skip straight to the playbook. Without further ado...
90% of America is now isolated at home due to coronavirus.
Retail businesses are indefinitely shut down by government mandate all across the country.
This is a great time to start a business. As Winston Churchill famously said - Never let a good crisis go to waste…
Let’s not take this lightly --- millions of American’s are out of work, with millions more freelancers and self-employed struggling to keep their businesses afloat as America is sequestered at home. The unemployment claim chart of the past 20 years looks like the Google Trends search volume for “left shark” the night of the Super Bowl in 2015, and pretty much every company save for Charmin, Whole Foods and Zoom is feeling the squeeze from America’s forced shelter. This is an awful situation.
Source: BuzzFeed News
But as history has proven, when crisis shifts our lives, new opportunities arise.
Watershed moments like this don’t just temporarily change our lives, they have lasting effects on our habits and values, and how we interact with the world around us.
They tend to upend and reinvent societal norms, creating a new playing field for business. By recognizing these shifts in human behavior and leveraging your own personal expertise and resources, crafty people can launch businesses that not only provide short term solutions for a changed world, but create long term value for yourself and your customers.
At every junction, there are entrepreneurs who pick up on these changes and create exciting new businesses that either:
Ride the new waves of technology or social behavior, or
Solve new sets of problems presented by the new world order
This is a look into what’s changed, how others are capitalizing on it, and a playbook for figuring out your own niche.
Successful entrepreneurs identify and ride waves, and we’re in the midst of a big one.
Let’s think about what’s changed over the past few weeks:
People are stuck at home, bored out of their minds and trying to find a sense of normalcy in their lives.
For the first time ever, millions and millions of Americans are spending Monday through Sunday sitting at home, wondering what the fuck they should do, wishing they had someone to talk to besides their roommates/significant other (if they are so lucky to have a roommate, otherwise they are sitting at home wishing they had anyone to talk to). People are thirsting for human interaction, and are looking for new ways to feel productive and/or like they accomplished something. After everyone has read two books and watched Tiger King, this will only get more dire.
People’s daily routines have been decimated.
Morning gym sessions, Thursday night book clubs, evening yoga, the Magic Show I was supposed to go to last week, Friday night date night, etc, etc, etc. It’s all #cancelled. 99% of people’s social lives and daily schedules no longer exist, and as we get past the initial shock of the crisis…. They are begging to be rebuilt.
Zoom has permeated everyone’s lives, and we are way more comfortable doing things digitally.
Six months ago Zoom was a fringe technology used by salespeople and techies. Today my roommate (high school teacher), dad (manages homeless shelters), mom (therapist), and girlfriend (aforementioned techie) all use the software multiple times a day - for both work and personal life - and are quickly getting more and more comfortable with the idea of interacting on video.
4. Subscription businesses are booming.
Although not directly associated with the coronavirus situation, this is a big one, and worth noting. From household goods (Dollar Shave Club, Quip) and clothes (Rent The Runway, StichFix), to exercise (Peloton, Mirror) and media (Spotify, New York Times), successful businesses in every domain are leveraging subscription models to lock customers in with a recurring, monthly payment --- and it’s working. Substack, a company that helps journalists break away from their employers and create their own monetized subscription newsletters recently raised $15M, and has already helped journalists everywhere from Fortune (The Profile) to the Boston Globe (Welcome to Hell World) to quit and start their own subscription businesses.
American’s have become acclimated to plugging in a credit card and paying a monthly fee for a product or service --- no matter what industry you’re in, there’s a good chance leveraging subscriptions can help lock in customers.
Like it or not, these shifts are here to stay, and new habits and norms created today will have long-lasting impacts on how we live our lives for years to come after the coronavirus goes away. “Zoom” has become a verb (I’m Zooming with your aunt tomorrow!”), and Americans are starting to appreciate the value in connecting with others around the globe via video conference. Millennials already preferred spending their money on experiences over things like homes and cars - now they’re just getting used to having those experiences at home.
So… How can you capitalize on these trends to create something valuable?
What are your strengths? What do you know a lot about that other people might be interested in? What knowledge or resources do you have that other people might be looking for? Whether pivoting an existing business or starting a new one from scratch, where is the intersection of how people’s lives have been shaken up and something unique that you can offer.
Let’s make this less abstract. Here are three incredible people whose businesses have been decimated by the recent economic changes -
Frank DeLaura, Arrow Movement - a personal trainer (stuck at home)
Alejandro Medina, Bibi Ji - manager of a small, local, family owned restaurant with a passion for wine (and a very large inventory sitting in a cellar right now)
Dan Churchill, Charley St. - a New York chef and cafe owner (closed, until further notice)
Though the core business of all three have been leveled by recent circumstances, each are a case study in adapting to the new playing field to creatively build new businesses...
Arrow Movement
What it was: Personal Trainer in New York City with a steady roster of 20 weekly clients.
The Situation: Vast majority of people’s exercise options no longer exist, people are stuck at home, and looking to rebuild regular exercise habits.
New Business: Subscription workout plan with peer-to-peer competition. Creating a daily 30-minute bodyweight HIIT workout, sent out with a short instructional video every morning to paying subscribers. Helping people to rebuild daily workout routines (at home), and compare scores/results with friends no matter where they live.
Bibi Ji
What it was: Indian restaurant in Santa Barbara, CA with a great wine selection.
The Situation: Stuck at home, many people are both a) drinking more, and b) looking for new ways to socialize/feel like they aren’t just sitting around drinking.
New Business: Virtual wine school + wine club. Offering a weekly Wine Tasting Class (via Zoom), and selling cases of wine to those who enroll, so everyone tastes the same wines together.
Charley St.
What it was: All-day cafe in New York offering healthy selection of breakfast and lunch.
What’s changed: With limited reasonably priced healthy order-in options - and as NYC folks with tiny kitchens tire of cooking every meal - people are looking for reliable, healthy meals.
New Business: Pre-ordered meal delivery plan. Taking weekly orders in advance, cooking large batch healthy meals, and delivering pre-made ready to eat meals to subscribing customers.
Though in three different sectors, all are capitalizing on two things:
People can no longer experience/consume their industry as they did a month ago, and
Now they are looking for replacements.
HOW CAN YOU DO THIS IN YOUR BUSINESS TODAY?
What’s fundamentally shifted when it comes to what you know best?
Albeit in different industries, there are learnings from each business we can take as you try and find your own niche. Below I’ve outlined a playbook for navigating the ideation of your own opportunities.
To start, a few questions to ask yourself:
What do you know a lot about? This could be directly related to your career (I used to be a chef, I know how to cook), or just something you know a lot about (I am a phenomenal storyteller, I am a whiskey aficionado). In what realm are you uniquely positioned to lead a discussion, educate others, or provide a service?
When it comes to how people typically interact with your domain of expertise… How have things changed? Three months ago, what did people do that they can no longer do?
Chef - people can no longer eat out, are forced to cook most meals, grocery stores have long lines
Storyteller - People can no longer go to book readings, writing classes, or gather at bars and swap stories
Whiskey Aficionado - people can no longer go to a bar hoping to meet new people, have a drink with friends, or go to a nearby whiskey bar to taste great spirits
Challenge: Grab a friend (in Zoom!), pick an industry, and spend 30 minutes brainstorming all the ways that people’s lives and options have been shifted by recent events.
Considering these change… How can you leverage the new playing field to create something valuable for people seeking new forms of entertainment, social interaction, and ways to replace old hobbies + habits? What do people want that they can no longer get? What new needs do people have that they didn’t have when all businesses were open? What do people have time for today that they didn’t have time for 2 months ago?
Start today. In an infinitely scalable world, first mover advantage is key - once I find my new at-home workout plan, I am MUCH less likely to spend much time looking for or even considering another one. Chances are, you are competing not just locally, but on a national (or international scale) --- this is exciting from the standpoint of potential customers, and scary from the standpoint of potential competitors. Get an initial version of your product/service out ASAP to start getting it in front of potential customers.
Don’t worry about having it “perfect” before you expose your idea/service to the world --- make it good enough to try and sell to your friends or old customers to get some initial feedback on what they love and hate. The feedback from 5-10 early paying customers (who understand it’s a work in progress) is 10x more valuable than waiting a month…spoiler alert: it will never be as perfect as the vision in your head.
The theory of 1000 true fans (roughly) outlines how in a world connected by the internet, finding and connecting with a significant number of people who are true fans of your idea/product/service becomes much easier. If your goal is to make $120K, and you can figure out a way to make $100/month per customer, you only need 1 in every 3,000,000 American’s to make it work. If you expand to all English speaking people on earth, you only need 1 in 15,000,000.
These are without a doubt some of the toughest economic times in American history, but with a little creative thinking, many people are going to find exciting new prospects to make ends meet - how can you make it happen?
