Bold Business Logo

Upside of a Pandemic: The Business Winners in 2020

The beginning of 2020 started out strong with a booming economy. Unemployment was low, the stock market was at record highs, and startups were numerous. But then the pandemic hit, and lockdowns and quarantines threatened the world with another recession. For many industries, it has been a tough year, and many small businesses have been forced to close. But for others, the opposite it true. In fact, not only are there several business winners in 2020, venture capital investing is at an all-time high. For those in the right sector, the pandemic has been quite a windfall.

It’s not a shock that technology sectors have done well with so many people working from home. But the pandemic has done more that simply encourage the use of videoconferencing tools and Netflix. In essence, COVID has accelerated consumer trends that were already in motion serving as quite a catalyst. Rather than evolving over years, consumer changes have been condensed into a few months. For this reason, business winners in 2020 were those that found themselves in such a growing sector. And based on the frenzy of capital flowing into these sectors, there’s no immediate end in sight.

“Almost every hot company right now is being pursued like mad. More than ever, there is this flight to being in the assets at any price.” – Matt Murphy, Investor at Menlo Ventures

A Perfect Storm for Businesses in a Growing Sector

When March hit, a tremendous amount of uncertainty existed. Investors and venture capitalists were unsure whether a recession was inevitable or not. Thus, with every pandemic report, the stock market would rise or fall almost on a daily basis. But in time, it became increasingly clear that there were going to be some real business winners in 2020. Many businesses were adapting to a post-pandemic world. By the time that many investors appreciated this fact, opportunities for good deals were shrinking. This was especially true for startups that found themselves in a growing sector.

Fast forward a few months, and venture capitalists and investors can’t wait to get their hands on a hot startup. Not only do they have a record amount of capital saved, interest rates reman incredibly low. Likewise, digital demands have continued to rise as has the stock market. Even the number of acquisitions and mergers have boomed in recent months. The combination of these factors is what’s driving many investors to seek out those in a growing sector. It’s also a reason why several startups have more capital than they likely need.

“I haven’t seen anything like this in over 20 years. The party is as loud and the drinks are flowing as freely as the dot-com boom, despite that we’re all drinking at home and alone.” – Eric Paley, Investor at Founder Collective

Business Winners in 2020 – Collaborative Work Tools

The pandemic forced companies to send employees to work from home. In the process, several began to appreciate the benefits of working remotely. As the months grew, more and more people became accustomed to this new trend. And many companies were ready to introduce their hot products to facilitate this transition. Videoconferencing software, social messaging software, and virtual events platforms were suddenly in huge demand. It’s therefore no surprising this industry has its fair share of business winners in 2020.

In the last 2 years, Zoom has gone from a valuation of $1 billion to $116 billion. Hopin, a virtual events platform, has multiplied its valuation 77-fold in the last year to $2.1 billion. And Discord, a social media platform similarly doubled its valuation to $7 billion post-pandemic. What do these business winners in 2020 have in common? Right place, right time, right platform. By providing quality technologies for collaboration and communication, they have excelled. And with this expected to be the new norm, venture capitalists keep pouring funds their way.

“They used speed to their advantage. Investors who are waiting for someone to raise a round — that’s almost too late.” – Peter McKay, CEO, Snyk

Business Winners in 2020 – Lifestyle Convenience Tools

Of course, work trends were not the only thing affected by the pandemic. Lives were turned upside down, and major shifts began to occur in consumer behaviors. The pandemic ushered in the Come-to-Me Economy, and as a result, several business winners in 2020 emerged. For example, delivery services represented a growing sector as did entertainment streaming services. Likewise, online fitness platforms and online learning companies also saw major increases in demand. In essence, any digital service that enhanced remote convenience seemed to be a winner. And investors took notice.

A business meeting on an unmanned laptop
It was a rough year, but there were some business winners of 2020 who found success in the paradigm shift.

Some of the business winners in 2020 are easily recognized today. For example, Instacart, the grocery delivery company, has doubled its valuation to $17.7 billion in the last year. Likewise, DoorDash, which is expected to go public soon, has been valued at $35.3 billion. But other companies in a growing sector this year may be less appreciated. Snyk, a cybersecurity software startup, has seen venture capitalist flock to its door. Robinhood, a stock trading app, has enjoyed 4 different rounds of VC funding this year alone. With more consumers getting comfortable with digital convenience, these types of businesses are reaping the benefits.

Predicting the Unpredictable

If one thing is for sure, this year has been incredibly unpredictable. No one would have expected some of these industries to boom the way they have. But then again, why wouldn’t they? Global events introduce major shifts that are catalyze change. Given the impacts that COVID caused on work, travel, and social lifestyles, something had to give. Those technology startups who happened to provide the perfect product for the times boomed. And venture capitalists have been eager to help. In fact, the third quarter alone this year saw $36.5 billion in startup funding. Indeed, many companies had seen hard times in 2020, but not all of them. Those lucky enough to be in a growing sector didn’t just do well…they boomed. And based on continued investing patterns, it appears this will continue for at least the near future.

 

Want to make 2021 a better year than 2020? Then check out PROJECT BOLD LIFE: The Proven Formula to Take on Challenges and Achieve Happiness and Success.

Agility and Dynamic Resilience Are Essential for Today’s Businesses

With rapid developments in technology over the last few decades, businesses have learned that flexibility and adaptability are essential. Failure to have agility in business often means newcomers or existing competitors will gain an advantage. But in a post-pandemic world, pressures to survive are highlighting the need for dynamic resilience even more than the competition. For companies that are unable to rapidly adapt and roll with the changes, the existence is likely to be threatened.

Between February and April of 2020, roughly 22 percent of small businesses closed their doors. This amounts to 3.3 million companies and startups overall. But just as many embraced a dynamic resilience required for survival in many cases and even growth in others. While this mentality is common among startups as they attempt to make their mark, tenured businesses often lack it. This has rapidly changed in light of the pandemic as companies are appreciating just how important agility in business is.

“Companies creating new websites on our platform, and email marketing campaigns, are at an all-time high. And e-commerce sales on our platform have doubled.” Anthony Casalena, Founder and CEO, Squarespace, a Website Building and Hosting Company

Defining Agility in Business

A number of terms are often used to describe agility in business. A formal account describes it as the ability to respond quickly and effectively to opportunities and threats in the market. In essence, this represents a dynamic resilience to bounce back no matter what environmental changes occur. At the same time, the term “fail-fast” is often linked to agile businesses, especially start-ups. This refers to companies that are constantly learning and adapting on the fly as they try new solutions. Understandably, those that exhibit these qualities have been the ones more likely survive as of late.

In any regard, agile businesses engage in a constant iterative process of trial and error. In education and research, such a process is often referred to as active research. Rather than conducting a study under controlled conditions, these experiments occur in real-time. An intervention is introduced, and then its effects are monitored. If the evidence suggests success, then the intervention is further developed. If not, a different approach is then considered. In essence, this is the same process that supports dynamic resilience in businesses currently.

“We are so much more efficient now, and because we have consumers buying directly from us, it’s much lower cost to launch a new product.” –  Michelle Carfagno, Owner, Greater Knead Bagels, Pennsylvania

Dynamic Resilience and Marketing

For some businesses, the pandemic has forced them to consider new strategies in marketing. For example, the Greater Knead bagel company relied nearly entirely on word-of-mouth advertising and in-store sales before COVID. But in its aftermath, stores reduced their orders, and the company had no way to reach customers. However, they embraced dynamic resilience and invested heavily in web and social media marketing. They also began shipping directly to customers. Both strategies have paid off well as a result.

A dart traveling a circuitous route to a bullseye
Finding the bullseye of success requires agility in business and dynamic resilience.

The agility in business the company showed certainly allowed it to survive. But more importantly, they also began using automation to package and seal their bagels. They also partnered with a larger fulfillment center in order to gain greater access to consumers. The new strategy allowed Greater Knead to bypass stores, which in turn gave them greater control over the customer experience. In essence, their willingness to embrace dynamic resilience allowed them to seize the opportunity to mature as a business.

“My brother and I really struggled with this big question. After eight years of working so hard, is it better for us to put all of our savings on the line again? Or do we cut our losses and let the team go?” – Sam Eitzen, Cofounder, Snapbar

Agility in Business Offerings

The pandemic has affected some businesses differently than others. Some have to consider agility in business marketing and operations. Others, however, have had to consider more radical changes. One such company is Snapbar, a company that provides event automated selfie stations and photo booths. Without events, the company found itself in a huge dilemma. One option was simply to call it quits and pursue new entrepreneurial approaches. But the owners chose to similarly embrace dynamic resilience and essentially reinvented themselves from within.

Understanding that events weren’t coming back anytime soon, Snapbar initially began selling gift boxes instead. Customers or businesses could fill gift boxes from local companies, who shared in the proceeds. Notably, this was a dramatic shift for the company away from selfie booths. For a while it helped, but eventually profits once again tanked. Not to be discouraged, Snapbar then reinvented itself as a tech company and began providing virtual photo booths instead. Today, their products provide attendees at virtual events and conferences to take event selfies and display them on Instagram. The company’s virtual photo booth is now its fastest growing product available.

How to Cultivate Agility in Business

In an effort to pursue greater agility in business, several strategies can be used. One of the most important for existing companies is to learn to let go of existing models and structures. When the entire climate around you changes, radical disruption may be needed. A willingness to start over is often something that needs consideration. In addition, exploring new market segments, new offerings, and new operations may be valuable. Lastly, dynamic resilience uses customer feedback and an inclusive culture to fuel needed change. Each of these features tend to characterize those who’ve embraced agility in business as a philosophy.

The bottom line is that nearly all business environments have been profoundly impacted by the coronavirus pandemic, good or bad. Trends that now exist include advancing automation, increased connectedness, and decentralization. Likewise, a Come-to-Me Economy is only gaining momentum. Companies with dynamic resilience will recognize that major changes will be needed and pursue them. And those who embrace agility in business will be the ones most likely to excel.

 

Want to make 2021 a better year than 2020? Then check out PROJECT BOLD LIFE: The Proven Formula to Take on Challenges and Achieve Happiness and Success.