How the Coronavirus Outbreak Can Greatly Cripple Tech Startups?

How the Coronavirus Outbreak Can Greatly Cripple Tech Startups?


The coronavirus outbreak looms over the world like a dark shadow that does not appear to be showing signs of being banished soon. Already, its impacts are apparent in the social-political and economic aspects of more than a hundred countries in the world. Global economic projections have practically been slashed in half and stock markets worldwide continue to tumble. There are even talks of a possible sharp global recession already.

Even the tech industry, with its pivotal role as a forerunner in advancing civilization, is not immune to its devastating effects. And no other fact can prove this than the hurdles that tech startups encounter that are the direct result of the COVID-19’s spread. Make no mistake, the tech industry is already suffering from low earnings and factory shutdowns.

Nonetheless, tech startups may be in for a rougher ride as proven by the obstacles that this coronavirus outbreak has sprung up to block the paths of many budding companies going forward.

Coronovirus & tech startups

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.

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Defend Your Tech Firms from Coronavirus Outbreak!

As the best startup app development company, we are more than willing to help startups gain a strong, stable footing to better weather the storm of this coronavirus outbreak. We can discuss and demonstrate to you all the solutions we mentioned here.

Steps CEOs Should Consider Taking

  • Accept that solid operational and financial palliative solutions have to be conceptualized and implemented as soon as possible to lessen the coronavirus impact and stabilize productivity.
  • Lean more towards a “lenient” and optimal workplace, one that acknowledges that interruptions in workflow are bound to happen and that most employees may not be able to work the standard office hours regularly. Since this is the case, tasks that need to be prioritized should be pinpointed and made known to everyone.
  • Develop a solid virtual workplace that has a sturdy and reliable communication foundation.
  • Come up with sound financial steps to mitigate the effects of supply and demand disruptions. Actively reducing costs, wherever possible, is but one reasonable step, besides looking at feasible short-term contracts to enter into.


While the world continues to reel from the onslaught of the coronavirus outbreak, it’s important for tech startups to recognize the areas they are bound to struggle the most in and be open to inevitable changes to mitigate its impact. No better strategy can be applied during these uncertain times.

The Unknown Factor of this disease can, indeed, be daunting as there’s not much data to verify its strength and most experts are projecting it will last beyond this year. Nevertheless, there is a silver lining to everything – and this couldn’t be more obvious in the reports that the coronavirus outbreak is beginning to wane in China, the first country it affected.

That said, tech startups can certainly view this outbreak as a challenge – a gauge of management skills and a test of how one can calmly respond to such stress-testing problems, in the same way, that most health organizations advise you to practice discipline in promoting self-hygiene practices and building your immunity to increase your odds of shielding yourself from this terrorizing virus. Without a doubt, startups, once they overcome these hurdles, will only develop a stronger and stabler foundation for growth.

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