The ongoing COVID-19 pandemic has brought about transformations to our daily lives. Not only has it changed individuals, it also reconstructed the way the economy works. One of the most noticeable consequences is a paralyzed economy, which in turn results in a financial crisis.
A hit on the economy like now is highly likely to deter people from realizing a business they had long planned for. The term entrepreneurship suddenly makes people nervous when mentioned during a financial crisis.
However, is entrepreneurship really not possible during a financial crisis like today?
Willson Cuaca, Co-founder and Managing Partner of East Ventures, makes it clear that entrepreneurship will sustain and remain strong with or without a crisis. In fact, he believes that crises will force people to seek opportunities.
So, how does entrepreneurship relate to crises? To answer this, we need to first dissect both these terminologies and see what they are.
During the COVID-19 pandemic, all countries across the globe have chosen to implement a strict area-based quarantine, or a lockdown, to prevent the virus from spreading. A lockdown means an incapacitated economy and, as a consequence, companies lose a majority—or in the worst scenario, all—of their revenues. Efficiency then becomes the only way out; temporarily or permanently lay off employees and cut expenses.
These lay-offs have obviously caused people to tighten their spending and hence a drop in the people’s purchasing power. In short, productions stop and consumptions drop. As a result, economic recession ensues and capital outflow is inevitable. When an economic recession takes place, investment is no longer interesting.
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Willson refers to all these causes and effects as a negative spiral that puts society in a very unfortunate situation.
“This crisis has brought drastic changes to how we live in Indonesia. This is what we call a game reset,” Willson said during a Studium Generale with East Ventures titled “Entrepreneurship in the Time of Crisis” held on 17 June 2020 by Binus University.
Game reset, as Willson mentioned, does not only mean change in human behavior but also in the rules of the economy. In terms of the change in human behavior, this is visible from how people now work from home and how interactions shift from direct to online communications.
Business models also change. For instance, restaurants that relied on dine-ins must now resort to online food deliveries, partnering with Grab or Gojek.
With the change in the business model, economic units are no longer the same as well. For example, the amount of income gained in a certain period of time differs between normal times and during a pandemic. During a lockdown, the government implements a social distancing policy, which limits the capacity of restaurant dine-ins.
In conclusion, there are four elements that businesspeople must pay attention to during a crisis. These are economic units, business models, way of life and work, and behavior, all of which are highly dynamic.
In another example, producers used to promote their products through television ads. However, as society’s way of life changes, promotions started to take place via YouTube that has different ad schemes. This certainly brought about changes in economic units.
But then, TikTok boomed and became the new platform to place ads, therefore forcing new changes in economic units once again. This dynamism will go on.
The above part of this article has elaborated a crisis situation as a context to discuss entrepreneurship. There are three keys to entrepreneurship, which plays a vital role in maintaining a business.
The first is focus. When initiating a startup business, investors must invest all their focus into developing and maintaining the startup.
Willson says that East Ventures always stress the importance of focus and put aside any distractions that come with a startup business.
“We at East Ventures always emphasize startups to focus on one thing but ensure that it’s done correctly rather than doing many things at the same time,” he said.
The second is innovation, which is about learning new things. Businesspeople must encourage themselves to continue innovating every day in order to hone their instincts. This will certainly take them faster to their desired destination.
In innovation, people normally see the result and how significant it is without so much looking into the process. In fact, when we look into the process, innovation is about connecting small things together to create something big. In short, innovation is about the power of compounding to result in something huge.
“Basically, innovation constitutes small but consistent steps for improvements,” Willson said.
Read also: Idea validation with Willson Cuaca: How to start an investment-worthy startup
The third is adaptability, which is about adjusting capacity with the surroundings, such as the game reset amid the pandemic. In a broader sense, adaptability is mapping issues against our skills with the aim of resolving the said issues.
A simple example of this is the adaptability of online-based motorcycle-taxis (ojek). Ojek drivers, with skills to drive, are having employers Gojek and Grab redirect their skills towards delivering food. As a result, online ojek are now a solution to our modern society that has limited time to get their own food.
These three keys to entrepreneurship are closely related to the four elements of crises (economic units, business model, way of life and work, and behavior).
“So, in the end, there is a connection between the two: entrepreneurship in times of crises,” Willson said.
So, does this mean that entrepreneurship does not exist without a crisis? Not necessarily. Every entrepreneur must always maintain focus, innovation, and adaptability. A crisis will only force them to see opportunities clearer and more directed. Crisis brings clarity.
“With or without a crisis, entrepreneurship will persist,” said Willson.
One may be referred to as an entrepreneur when he or she can sense opportunity and immediately act upon it.
“Entrepreneurship is closely related to actions,” Willson said.
Whatever the situation, he believes that an entrepreneur must be bold enough to map the issues, seek opportunities, and offer solutions.
The COVID-19 pandemic has changed the people’s way of life. People work and study from home and limit themselves from outdoor activities. A good entrepreneur will see this game reset situation as an opportunity, for instance, as a chance to develop an online learning application or even a web-based grocery market.
The current pandemic has also made us spend more time with gadget screens. Entrepreneurs with good instincts would capture this moment, for instance, to make fun content, games, or some other things that involve the use of gadget screens.
“Crisis or no crisis, opportunities remain,” Willson said.