How I learned to stop procrastinating and start realizing that now is the best time to launch or pivot a new product offering or startup – yes, despite the pandemic.
Were you in the middle of launching a new product or startup when the pandemic hit? Like many entrepreneurs, you probably hit the brakes on your project or put your new ideas on the back burner to conserve resources and ride out the uncertainty.
Many of us were optimistic that the storm would quickly pass. But weeks have turned into months, and the reality is finally starting to set in:
We have shifted into a new normal, and some things will never return to how they were.
So what do you do with your product/startup plans?
What if I told you there has never been a better time to start up or pivot your product?
While bracing for survival is often the first (and right) instinct during a crisis, once certain basic measures are in place, this is also a time to re-evaluate opportunities with a new perspective.
Crises have historically resulted in a massive redistribution of the value chain from incumbents to new challenger companies and products.
Here is a small sampling of such challenger companies and products created during past crises listed in chronological order from the great depression to the present:
- Post the Great Depression 1930s: Disney, Hewlett-Packard, Lego.
- Post World War II 1940s: Sony.
- Oil Embargo recession 1970s: Microsoft, Apple.
- Energy crisis in the 1980s: Electronic Arts, Adobe, Whole Foods.
- Post Dotcom bust in the 2000s: Apple launches iPod and the iPhone, Mailchimp.
- the Great Recession of 2009: Uber, Slack, Airbnb.
- COVID-19 2020s: TBD
Innovation comes from struggle.
This isn’t a new concept, but the bigger question is, how do you position your company on the right side of this value redistribution?
The job of a startup
Startups are in the business of challenging the status quo by introducing new ways of doing things and causing a switch from an old way to their new way.
Yes, no matter how disruptive your offering is, there is always an old way.
It helps to visualize "innovation as switching" using a hill-climbing metaphor:
Simply introducing a better new way isn’t enough to cause the switch.
Because consumers are creatures of habit, their default position is to resist change. In the hill-climbing metaphor, this resistance to change is inertia.
Furthermore, a new way, being new, is uncertain and invokes anxiety which introduces another resistive force: friction.
The inability to overcome consumer inertia (habit) and friction (anxiety) is why most first-to-market products fail.
They require too much behavior change that consumers are not yet ready to undertake.
One way to overcome this inertia is building a significantly better product (as perceived by customers, not you) with an order of magnitude (10X) leap in value proposition.
So why don't all startups do this?
Because building a 10X better product that customers can 1) readily find and 2) easily understand is easier said than done.
In other words, building a truly awesome product out of the gate is rare and hard to pull off in the consumer's mind. Unicorns, anyone?
Most products, even the unicorns, have to slog through the product adoption lifecycle.
The average time to find product/market fit is about two years, and 80% of startups never find it.
This means that most of the time the incumbents are naturally favored to win…unless…
Unless something external changes that break the incumbent.
This brings us to vitamins.
Vitamins vs. Painkillers
What causes you to buy vitamins? When do you stop taking vitamins? There isn’t a clear triggering event for either. This is why vitamins are in the nice-to-have product category.
If you’re building a vitamin, the burden is on you to interrupt the customer and trigger them to buy your product. Not an easy task.
Take painkillers, on the other hand.
When you’re in pain, finding a painkiller quickly rises to the top of your decision tree and becomes your top priority.
If you’re building a painkiller and if/when customers are in pain, they seek you out, making them must-have products.
Vitamins are aspirational, while painkillers are problem solvers.
Also, consumers are more motivated by eliminating pain than by acquiring gains.
What's the takeaway?
Every product switch requires a triggering event.
Most of the time, startups have to take on the arduous task of creating interrupt-driven triggering events using their marketing messages. Again, not an easy task.
But now and then, we run into intrinsic triggering events.
These types of triggering events challenge or outright break the old way and create an extra helper force that helps motivate or push the customer up the hill -- thereby reducing the switching gap from the old way to your new way.
Crises are intrinsic triggering events.
Crises naturally challenge the status quo providing an additional push for change. This is exactly why they also create massive opportunities for innovation.
A new normal
In just a few months, COVID-19 has broken many old ways and has changed consumer behaviors across many industries: travel, food, education, work, and entertainment, to name a few.
These are all billion-dollar industries.
The added PUSH has accelerated the pace of new way adoption even in traditionally bureaucratic or conservative industries.
While it’s too early to call startup winners, here’s an early list of product winners that have seen explosive uptake in traction since the pandemic started: Amazon, Zoom, Netflix, Peloton, and Spotify.
Because they all were in the right place when the old way broke.
There are many such yet-to-be-discovered new opportunities for the taking.
But it requires a new perspective.
A black-swan event
Unlike all the other crises before it, this one is unique.
COVID-19 is playing out at a global scale affecting 8 billion people simultaneously.
What you discover works in your backyard potentially could work in all backyards.
So you need to think bigger from day one.
Speed has always been a startup’s unfair advantage
This is even more important today.
While incumbents scramble to survive and adapt, the bigger challenge for capturing market share will come from other startups which turn their sights to studying similar opportunities.
The new winners will be those who learn, iterate, and adapt quickly in the face of extreme uncertainty.
Are You Ready For the Challenge?
We are here to help.
You'll learn how to size up opportunities in the face of black swan events like COVID, position a new product for a switch, and move quickly towards capturing traction.