During the last year and a half, there has been a record number of startups emerging.
Through a combination of home confinement, accessible tech, furlough schemes, and time to contemplate the gap between the current state of things and future hopes and dreams, these factors have come together to produce a surge of entrepreneurs.
It’s said that tough times make tough men. Judging from the last two years, tough times have certainly made entrepreneurs. During recessions in the US, there is typically a rise in entrepreneurial activity.
When it comes to the pandemic, during 2020 there was an increase of 4.4 million new businesses in the US – this represents an increase of 24.3% from 2019. But more impressively, that’s an increase of 51% from the average between 2010 and 2019.
And since the beginning of 2021, half a million more businesses have already been set up.
So, with these numbers in mind, let’s take a look at what it has been like for these pandemic entrepreneurs, and how they’ve managed.
Being bossless the source of inspiration
With the lack of control over decisions such as forced layoffs and furloughs, being your own boss has provided a source of inspiration for many new entrepreneurs. In fact, 57% of them cited being in charge as the main inspiration for starting their own business.
Creativity is a prerequisite
Among a list of important qualities that an entrepreneur needs during a pandemic, respondents chose creativity as the number one by a big margin – cited by 57% of those surveyed.
Homebound adults started selling their own goods out of kitchens, started selling their own gear, and took on a side-hustle to top up their income.
Forced acceleration
The pandemic propelled people’s plans forward, with 25% stating that they had been laid-off or furloughed due to the pandemic. Setting up their own business was jerked into action out of necessity.
Yet many of them had been either thinking or planning an entrepreneurial move before the pandemic, or simply saw a forced opportunity amidst the uncertainty.
D2C is the model
The vast majority of new businesses to crop up since the pandemic are D2Cs. In fact, 80% of them sell directly to consumers. Thanks to the current state of global digital infrastructure, startups can set up shop and use models such as drop shipping, or have a presence on global marketplaces, has never been easy.
The more popular products and services to be sold are retail goods (clothing, crafts) software (apps), and services both virtually and in-person).
Low-cost barriers
Around half of all those surveyed (52%) that has small businesses set it up using less than $10,000 in funding. And among these, another half set up their own business with less than $5,000.
And separately, almost 80% of new founders used cash from their own bank accounts to get it off the ground. While around 30% received investment from friends and family.
Digitally native business
Startups that are digital-first mean that they require little more than an online presence – there are no physical barriers. A laptop and phone are all it takes.
Around a quarter of new businesses stated that they are working as a purely digital business.
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