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Don’t Bury the Startups Alive

The future of startups during and after COVID

One of the most obvious and direct effects of any crisis is the replacement of creativity and brainstorming by a system-based approach, one that pursues stability and conscious, objective planning. In those times, daydreaming is for the reckless; responsible people stand firmly planted on the ground, not just with two feet, but with ten toes dug in. That raises the question: what will happen to the fully-grown, empowered startup world of the last decade?

“Idea Factories”

How many times have we seen this term in the last decade or so? At least a million! Unfortunately, in most cases, it suggests that “I don’t have a business, and I don’t want to build one for profit, so I’ll try to come up with a nice-sounding idea for someone”. Not to offend the now-grown-up startup generation, but few have grasped that the time has passed when businesses could emerge from nothing, seem like nothing, and often do nothing. Real money can no longer be made from all this “nothing”.

Everyone has ideas. If someone is blessed with the right creativity, they can produce “ground-breaking” ideas every day. The only problem is that, in most cases, the ideas are unfeasible, they do not have a suitable market, and no demand can be created for them. They are just ideas that ordinary people have. Naturally, the number of idea-makers has increased amid such a “try your luck” era. The last generation to enter the labour market during this period was born between 1985 and 1996

Importantly, Ambitionists began building their careers during or in the wake of the 2008 Great Recession crisis, so for many, launching their own startup seemed like the only viable option. Furthermore, this generation, which grew up watching talent shows and superhero movies, saw how completely unknown people could become stars in a matter of weeks. As children, they saw many startups become world-famous, many with massive global impacts, like how Facebook slowly cemented itself in their lives. Long story short: less work, faster wealth — that was the pattern before them. We could say that all this is a generalisation, and it is obviously not typical for every single member of this 12-year generation. But it is especially true for startup founders! So, a plethora of ideas circulated the market, and the point was “We should inflate the balloon as big as possible. Big enough, at least, for someone to believe it’s a good deal!”

Buyer’s Remorse

But who bought these ideas? And I must emphasise that these findings are not valid for all enterprises, especially not for those that have evolved from the startup stage to become enterprises with remarkable potential. Those who developed are well-known anyway because they succeeded by dynamising business with their message. Instead, we’re talking more about startups that never became real businesses. So, who bought these ideas? Who saw such value in these businesses (which were often doomed to fail) that they were willing to invest serious sums in them? Well, that target group was evident from the get-go! It consisted of managers who performed well at some point, who often led large companies for decades, and thought that just because they were top managers for a long time, that their repertoire included starting and building up new businesses. Plus, in many cases, they “aged out” idea-wise; they didn’t have fresh, modern ideas, and they did not want to shout this from the rooftops, so they tried to see fantasy in these startup ideas. As strange as it may sound, much of the investment was not aimed at making a profit, nor at embracing socially important issues, but simply at protecting egos. The message to themselves and the market: I’m still a “cool” businessman. And since these investments were about their image, there was never an objective admission that it was indeed a dead end.

Daniel Lincoln

The other important target group consisted of multinational companies, who, for fear of losing their market positions, saw these questionable ideas as solutions. This happened in part because the new generation was no longer attracted to the corporate atmosphere, at least not as much as previous generations. It was much cooler to go to work for a trendy startup than to be a drone at a fossilised mammoth firm. As a result, multinationals had trouble accessing the most talented employees. Thus, their chances of competing with the most modern players in the market became very slim. The managers at the multinationals, however, still had to show that they were keeping up with the world. They had to signal this to the market, HQ, and their own organisation. And multinational companies have always had significant resources available for strong managers with well-targeted business plans; just in this period, it resulted in ill-considered and even unprofessional startup acquisitions.

Out of the frying pan and into the fire

Well, this era is over once and for all! COVID-19 has decimated these hopes just as effectively and quickly as it did the travel industry. The difference is that people with the right sense of justice do not shed tears for this change. However, they also sense danger in the processes that have just begun. It’s okay for managers and businesspeople who are stuck in the past, or stuck in a robotic routine, to step back and not spend millions because of trendiness or mere self-deception. On the other hand, it is dangerous that businesses with great potential could fall prey to this new trend. It will stifle promising businesses from the start. Furthermore, creativity will be categorised as an undesirable personality trait, which will keep us from finding a way out at both the micro and macro levels. Imagine how many startups ideas could have provided meaningful solutions.

There is no exact data about this. But surely everyone can name at least five startups that have changed the world, and love them or hate them, we would certainly be worse off without them! We need to pay close attention to these values in the years to come. That is, to ideas that have yet to be born, but that can change the world! As a business developer, people often ask me about what kinds of people can launch truly valuable startups. Those that have truly “ground-breaking” ideas! I study personality types quite intensively and extensively, and we have in-depth analyses of the personality characteristics of “world-renowned” businesspeople. That is why I can say with confidence that there are several forms of creativity. Every personality type can elevate a working idea to the viable business level. One type starts their business because of its affinity for premium status, while another starts one because of their uniqueness. There are those who, because of their outsized empathy, understand people at a level that can serve existing but unspoken needs; and there are those who are immersed in a particular profession at a depth where their research and scientific knowledge drives them to launch a new business. And of course, there are those with money-centric, profit-seeking, superficial, and useless ideas.