Tech Startup Challenges Inherently Tied to the Coronavirus
At the heart of these challenges are key economic concepts, particularly disruptions in demand and supply. The profusion of quarantines and travel bans worldwide, more or less, serves as the main cause of the said disruptions.
Such drastic measures pretty much have a domino effect that can topple any company’s production. Startups, being still at their growth stages, get the shorter end of the stick in this regard. This could not be more obvious in the following list of seemingly herculean challenges that they have to face.
-
Inevitable Big Declines in Productivity
Having no choice but to adhere to restrictions set by quarantines and travel bans, most tech startups have no choice but to accept the fact that their employees’ attention will be divided. With the relatively quick and expansive rate in which COVID-19 is spreading, startups have to anticipate the very real possibility that their employees’ lives will be affected by various.
This can be directly (i.e. they become infected themselves) or indirectly (i.e. taking care of their household or a family member who might, unfortunately, contract the virus). Self-quarantine protocols alone often require an isolation period of at least 14 days. What more if the employee has been confirmed to be infected?
Companies have to accept the reality that there will be absences for long periods of time or more instances of late arrivals at work due to family matters and commuting problems. How startups respond to these interruptions in the workflow can be considered as difficult tests on their administrative skills.
-
The Possibility of More Employees Availing of Benefits
One other possible financial strain that the coronavirus impact can bring involves the likely scenario of more of their staff opting to take sick leave or family leave. If they have been promised healthcare benefits, expect them to utilize them as well. Are startups prepared to cover for such an influx in such a short period? The struggle to offer support for all of them can be herculean, to say the least, and can break the backs of fledgling companies.
-
Temporary Closures of Offices and Facilities
Since efforts to curb the spread of the various requires drastic measures, tech startups need to anticipate the very real possibility that they might end up closing their offices as part of social distancing strategies. The sudden proliferation of work-from-home setups worldwide only paints a grim picture of how most companies are trying to cope with such policies. Even if these shutdowns aren’t permanent, this can undoubtedly impact the productivity and performance of most employees.
-
Big Supply Chain Disruptions
The fact that China, the world’s leading producer of industrial goods, was the first one to feel the coronavirus impact made this an inevitability. And these interruptions are only bound to continue the more the virus spreads to other countries that play key roles in maintaining these supply chains. Not only delays should be expected but possible shortages, too.
Tech startups suffer, in particular, from delays in soft supply chains that can lead to poor performance in fundamental aspects such as contracting, data acquisition, among others. Companies who rely more on outsourcing (and they are a lot) may also see vulnerabilities in properly rendering crucial tasks, not least of which is customer service.