Similarities Between COVID-19 and the 2008 Financial Crisis: What Can Businesses Learn?
Looking back gives insight into how businesses will adapt post-COVID-19
The 2008 Financial Crisis saw the birth of Instagram, WhatsApp, Uber, Airbnb, Dropbox, Slack, and many other great tech businesses led by mostly young founders. This was partly due to the fact that technology has always continued to accelerate at an astounding rate, despite fluctuating economic conditions. What’s more, tech firms don’t necessarily need a string of investment to develop their solution and prove their value.
Securing investment and funding for startups and businesses
There are many examples of innovative businesses that have secured investment via equity crowdfunding during the pandemic. Part of the reason their success was meeting the changes brought by coronavirus head-on. Recent examples that TribeFirst has worked with include TV.Fit, a health and fitness streaming service which raised £2.2 million on Seedrs. They had long understood the need for on-demand access to health and fitness support, particularly as indoor isolation became the norm.
The team investment app, Pynk, which aims to decentralise finance to help mitigate recession – an obvious threat brought by COVID-19 – raised more than a third of a million on Seedrs. And Medic Bleep, which aims to replace pagers in the NHS with its secure, real-time commus solution was able to prove it could save the health service time and money – a crucial innovation during a pandemic. They raised £815,000 on Crowdcube.
Businesses adapt to changing customer values
Historical shifts, such as COVID-19, may also mean that companies in their current forms are no longer valued by customers and, if they don’t adapt, will go the way of Blockbuster. And when giants fall, they leave space for new contenders to open up. Those who move quickly, and strategically, can dominate.
The other factors at play here are open to debate. It may be down to the fact that when our once-entrenched ways of life are forced to change or put on pause, new visions are able to be dreamed up and implemented. For example, going into the office was seen as a necessity for many businesses pre-Coronavirus yet, being forced to work from home has offered a better work-life balance for employees and reduced overheads for businesses.
Startups and innovation lead the way
When upheaval occurs, there is space and opportunity for new companies to dramatically change the ways we live our lives, creating a new paradigm and, with it, new markets. Unprecedented times call for unprecedented measures, after all.
With coronavirus, the landscape has been well and truly altered – how we live and our daily lives, and think about work, healthcare, transport, welfare and the economy has all changed remarkably. The ‘new normal’ we now face will be considerably different to one we knew just months ago, and will not snap back to how things were pre-coronavirus.