It is hard to find many bright spots amongst the chaos created for business by the Covid-19 pandemic. However, while multiple traditional companies have struggled, one area that has stood out is the explosion in the number of new business formed in 2020. The US, UK, Germany, France and Japan all saw substantial increases in new company registrations – in the US, business formation applications were up 82% in the three months to September 2020 compared with 2019. Of course, few start-ups can truly scale quickly without help, so it is also heartening to hear that despite the current uncertainty, the majority of venture capitalists are still funding new endeavours.
To learn more about how the startups are emerging from the crisis, I had the privilege to catch up with Anthony Rose, Founder & CEO of SeedLegals, but also a serial entrepreneur as well as being recognised as ‘The man behind BBC iPlayer’. SeedLegals launched as the world’s first platform to help founders and investors easily create, negotiate and sign the legal agreements they needed to do a funding round. In less than three years, SeedLegals is now the largest closer of funding rounds in the UK – a scene that is thriving despite the impact of coronavirus.
Anthony Rose, Founder & CEO of SeedLegals
“Considering the last year, it may come as a surprise to see the UK startup landscape is in surprisingly good health. Encouragingly, the UK has seen a 16% increase in the number of new tech startups launching over the last year, and it appears that some of the many people who were furloughed or made redundant are reinventing themselves as founders.”
The UK as seen a wealth of innovations arising as a result of the pandemic; from healthtech to edtech, entrepreneurs have been launching and pivoting their businesses. For many that SeedLegals has worked with, this has already resulted in astronomic growth for their businesses.
“We saw a 26% rise in Bootstrap investing through SeedLegals, with the highest number of rounds closing in October and August, suggesting an increase in the number of new companies that launched in the wake of the pandemic. Under such challenging circumstances, it’s also really encouraging to see friends and family offering a helping hand to budding entrepreneurs. While we have seen success, this is not true for all of them of course. Some are simply keeping the lights on, and others have had to close completely. These have been most noticeable in industries with the harshest restrictions, but entrepreneurs are resilient, and I hope they’ll come back fighting when things look a little more normal.”
Startups are clearly face a plethora of very specific and uncertain challenges at the best of times, but at the moment these have been exacerbated. Many existing businesses have had to pivot their offering to adapt to dramatic changes, including those associated with Brexit regulations and, of course, the repercussions of the pandemic that defined the past year. While it is clear there is no silver bullet, but this is something every startup will need to overcome their present challenges to survive – particularly those who are continuing to grow their teams and have new members joining remotely.
“With business growth either hindered or expedited by the pandemic, more entrepreneurs than ever are seeking investment, and competition is fierce. My advice to all founders, whether they’re seeking investment or not, is to focus on building and maintaining relationships in any way they can. Even if you hated networking before the lockdown, it’s vital you understand how and when to take advantage of opportunities like digital conferences and online industry events right now. You never know when you might need them.”
Panoramic view of spring flowers in the park
Investors are still looking for business opportunities – but founders need to be more focused than ever on explaining what makes their idea unique and ready to see current market conditions are a positive.
“The fundamentals for an investor haven’t changed. Smart, passionate founders who have a bold vision and who stop at nothing to achieve it, will always be important. With the way the world is right now, things will almost certainly change when it comes to product vision, the market, and their customers, so investors will be looking to find founders who see every challenge as their opportunity. While resilience will be key, during this period of uncertainty, founders who can cut through the noise and focus on the long-term ‘bigger picture’, while also navigating their teams through these tough times, will be the ones who really stand out.”
2020 also saw a huge increase in the number of healthtech startups – something that Rose expects to see continuing to grow in 2021 alongside edtech and DeFi (decentralised finance).
“I think it goes without saying that healthtech will continue to become increasingly important, and grow as a result. As will anything related to physical events, as companies in this space continue to pivot and innovate their offering. I also believe that there’ll continue to be huge change in EdTech, with online learning becoming the new norm. Decentralised Finance is becoming a new buzzword and we’re likely to continue to see this space grow. However, like blockchain, this will, for the most part, continue to be a solution in search of a problem.”
Blockchain network concept
Of course no article on trends to expect for 2021 would be complete without a view on what is next for traditional office use.
“Remote working is for many of us, now simply a fact of life, but startup culture thrives on collaboration and creativity, which can become somewhat stunted or miscommunicated over emails and messaging platforms. As such, I believe office space is also likely to see a host of new players – with nobody actually needing physical space right now (yet many still paying for it), we’re likely to see businesses reinvent the traditional office rental model. Just as we’ve all gotten used to talking to people in little rectangles on screen, we also believe the world of work set to change again with wonderfully immersive remote working and conferencing solutions that do a better job of mimicking real-life meetings. For example, this could include video conferencing software that replicates your physical office layout, so as you ‘walk’ past people’s desks (on your screen) you pick up or join conversations, and have impromptu watercooler meetings again.”
For any newly launched company wanting to stand out in 2021, being exceptionally clear about the problem you are looking to solving in all elements of your business model is fundamental for every founder, whatever the socioeconomic landscape might look like.
“I always recommend to start with your vision but move forward practicality, always coming back to the customer and the problem you are solving for them. Secondly, never shy away from change. The best founders thrive in uncertainty, seeing change as a chance to take advantage of new opportunities and shift company goals to align with future growth or a changing market. Sometimes leaping into the unknown is a necessary risk (with your due diligence, of course), and it’s often a sign that a business is transforming into its next stage.”
Leaders of traditional companies have much to learn from these ideas; being clearer than ever on what makes your companies proposition unique is more critical than ever, as it being prepared to pivot to survive disruption. As we hopefully emerge from the pandemic is it also key that marketing leaders pay attention to the dramatic shifts in market trends so they too can ensure they are positioning a brand that can be in it for long term. With so many successful startups dramatically disrupting their industries only the strongest and most flexible will survive.
Dr Geraint Evans (or ‘G’) is an award-winning CMO/CDO and writer. After failing to become a rock star, actor or professional rugby player, he went on to hold leadership