UNSW Founders, a startup program, has seen an increase in participation in recent months despite the pandemic. The program focuses on helping UNSW students, staff and alumni to build entrepreneurship skills, and found and grow real companies. And this year, the number of participants is much higher than last year.
The program has managed to create more than 800 sessions that connect aspiring entrepreneurs and their mentors.
David Burt, the Director of Entrepreneurship at UNSW, said that the pandemic is forcing people to go through a career transition and because of that, more people are considering starting their own businesses.
“There’re a lot of people that are kind of mid to late stage in their career that have or will lose their jobs due to Coronavirus,” Mr Burt said.
“Now is a great time for them to be considering – with their kind of wealth of knowledge and skills and networks – can they start companies? We’ve seen an increase in demand from alumni in particular. People who have twenty to forty years of work histories are showing up to take part in our programs at a much higher rate than last year.”
Mr Burt also encouraged fresh graduates to consider opening a business as an alternative to job-hunting. As many roles are lost due to COVID-19, and there are fewer employment opportunities, those who are still in the early stages of their career will also be heavily impacted.
“So, if they have a skill, a passion, and something they’re interested in doing, in parallel with job-searching, they can experiment with a company they might start,” he said.
Founding a startup company, however, will never be an easy task. It is even harder now as the pandemic creates more uncertainty in the market.
Mr Burt shared several tips that startup owners should do during this time.
Minimise business cost
One thing that Mr Burt recommends to new and aspiring startups business owners is to try to minimise their costs, especially in terms of capital cost.
“One of the things that we’ve seen in the startups that do quite well is renegotiating agreements with suppliers and service providers,” he said. “They cut their costs by fifty to sixty, sometimes 70%. They cut their non-labour costs a lot, just through reaching out and trying to renegotiate and involve some deferral of payments.”
Cutting off costs is vital as many customers, and potential customers, are reducing risk and slowing down decision making.
“What we’ve seen is that customers that had signed contracts are trying to delay payment or trying to end those contracts early,” Mr Burt explained.
Because the customers are taking more time to reach decisions, the overall sales cycle is getting longer, preventing businesses from creating revenue. As a result, startup owners should need to consider their suppliers’ situation before making a decision.
“If these startups deal with physical goods, and if they have global supply chains, there was definitely a disruption to the physical supply chain for some startups,” he explained.
Don’t assume consumer behaviour
According to Mr Burt, human behaviour is sticky and hard to change, even during the pandemic. Thus, entrepreneurs shouldn’t immediately assume that consumers, especially retail consumers, are going to change their behaviour drastically.
“Don’t expect that COVID-19 and the pandemic are going to fundamentally shift your customers’ behaviour,” he said. “Your customer’s behaviour might be being affected by physical lockdowns, or they might be a temporary thing that’s changing customer behaviour. But startups need to be mindful about what has changed, what is different.”
Consider the non-obvious business
Instead of worrying about consumer behaviour, it is more important to see opportunities within the business owner’s expertise – but from a unique perspective. Most of the time, according to Mr Burt, the good opportunities are the non-obvious kind.
“One of the biggest advantages that a startup has over bigger companies is the speed of decision making,” he explained. “If you identify an opportunity, a startup can pursue that opportunity much faster than a bigger business. This is because a larger business has a lot more processes and people to make decisions before they chase something.”
One of the innovative or unique business examples is drone piloting. This uses commercial pilots’ skills to fly commercial drones, as most pilots are unable to operate planes at the moment.
“[The pilots] are 300,000 highly skilled people with a little bit of retrain,” Mr Burt explained. “So when you think about the economic opportunity that’s created like that and think about finding opportunities in a pool of talent that suddenly becomes available, you can grow rapidly.”
Find a mentor for startups
Mr Burt recommends that young business owners find a mentor or seek help from their networks.
“There’s a lot of mental stress and pressure to deal with. That’s why having a mentor or a coach who has been through something like that can be valuable.”
Mr Burt said that this doesn’t necessarily have to be from the startup pools. Most of the time, new business owners can find mentors that have been in more significant businesses. That way, the mentors are more likely to have gone through the thing that every business is now facing: an economic downturn.
“Try to find people you can learn from to collective problem-solve with. Now’s the time to activate your community around you that can help you be successful,” he said.