Tech businesses could benefit from re-tooling during a slowdown and emerge from the pandemic more resilient.
Tech is like most sectors of the economy in that it is experiencing some negative impacts from the pandemic. Cleantech, for example, lost 106,000 jobs nationally in March, and the number could rise to 500,000 by summer, Forbes reports. But some sectors are scrambling to keep up with demand in the changing business atmosphere, and that includes quite a number of tech companies. For example, energy analytics companies are experiencing higher-than-ever demand, Forbes reports.
Despite the stresses of the current situation, it also opens opportunities for tech companies, especially small ones, to do more than just tread water. I recently spoke with Gilbert Michaud, assistant professor of practice in the Voinovich School of Leadership and Public Affairs at Ohio University, about how tech companies can boost their resilience during an economic slowdown.
“I think where you’re losing a lot of momentum is on the smaller scale stuff,” he said. However, these businesses can turn their size into a boon because “the smaller ones are inherently more flexible… The ones that are a lot more flexible and adaptable, I think at a time like this it really shows.”
Here are some steps that tech businesses can take to stay afloat and become more resilient, or able to bounce back quickly from difficulties, based on Michaud’s insight and my research of small business subject matter experts’ insight:
- Pivot to new ideas to meet an immediate demand. Small tech businesses should leverage their flexibility by pivoting to a different model as necessary to meet new demand. “I think one positive thing about the pandemic, you’re probably seeing more multiplier effects for tech-oriented businesses and those who are helping other businesses with virtual remote adaptation and work,” Michaud said. That was the case for Ellytronic, a Chicago web application development business I featured last week, which experienced a surge in demand from customers migrating traditional businesses online. Another example is the plethora of 3D printing businesses that quickly transitioned to printing personal protective equipment to meet the new demand; many of these businesses otherwise were experiencing a slowdown, but they pivoted to fill the gap.
- Revisit (or visit new) ideas you’ve been wanting to explore. Just about everyone has a skill they would learn or idea they would research “if only I had more time.” Well, now there’s time. Do a deep dive to see if the concept is viable in the new business environment, and maybe even revamp your business plan around it.
- Explore new client/investor leads. Don’t automatically assume that every business currently is in dire straits and would be unwilling to invest in your ideas. A lot of businesses are adapting to the new environment, and you never know which partners previously might not have been a fit, but their adapted business model makes them the perfect fit now. American Inno explains that some Midwest investors find economic downturns – or the period immediately after – ideal for investing in startups.
- Reinvent your messaging. Not all marketing strategies and advertising messages that were previously in place are appropriate at this time. But that doesn’t mean you have to remain silent about your business. Retool the message to help customers understand how you can add value specifically during the pandemic. Or highlight your humanitarian efforts. Slowdowns are also a great time to upgrade mission statements or improve outdated websites.
- Boost efficiency and productivity. Cost cutting is a natural response to business difficulties, but it is not the only thing to focus on. For example, the pandemic forced many people to transition to remote work, and that model might end up being a more cost-effective way for some tech businesses to operate – at least in the short-term – when stay-at-home orders expire. It holds potential to not only reduce costs for office space, but simultaneously boost employee productivity. “A lot of folks realize workers can be productive at home. Many studies have investigated this and researchers quantitatively have shown people may be working harder and longer at their house,” Michaud said. This is an ideal time to identify and eliminate inefficiencies in business operations.
Crises and recessions make for difficult business times. But in many ways, they present an excellent opportunity to try new things and drive improvements. The core idea is to keep moving forward and not just sit back and wait for conditions to change. That can help businesses come out of a negative situation more resilient than when they entered it.
Do you know of Midwest tech businesses that are using this time to improve? Let me know so I can highlight them in a future newsletter. Email email@example.com or connect on Twitter @centereddottech to share ideas.
Other stories we’re watching:
- Real estate technology business Truss has experienced an uptick in interest in its 3D virtual tours of Chicago offices since the pandemic began. Landlord requests to add properties increased tenfold in a two-week period, and Truss is working to send 3D cameras to the backlog of buildings to create the virtual tours. (Chicago Tribune)
- Hospitals across the world are using Surfacide Manufacturing’s ultraviolet light technology to disinfect hospital rooms from the coronavirus. The Waukesha, Wisconsin, company’s UV-emitting, robot-like machines “laser map” the hospital room and then disinfect all surfaces, from floor to ceiling. (WISN Channel 12)
- La Grange, Illinois-based Dubak Electrical Group developed a touchless system that scans up to 16 people at a time and records their temperatures within half a degree. People do not have to stop moving, so the technology could be useful for monitoring crowds, such as at sporting events. (CBS 2 Chicago)