If there is one thing, we have learned from 2020, it is that a lot can change within a year. While we all strive to put that year behind us, we often neglect the fact that emerging problems leave room for innovative solutions. Additionally, a handful of trends that surfaced last year will continue to gain relevance in 2021. Therefore, we argue that if you have been waiting to start your own business, there is no better time than now. Not convinced yet? Well, here come three reasons why 2021 is the perfect year to start your business.
#1 The macroeconomic framework
2020 will certainly not go down as the most successful year in stock market history. According to IMF, global growth is projected at –4.9 percent in 2020 - the worst performance since 1946 and the aftermath of World War II. Contrary to popular belief, however, financial downturns are a great time to build businesses for several reasons: Interest rates are at record low levels and the large number of job seekers, as well as the advent of "remote office " has opened up a larger pool of talent from which to choose when hiring.
In fact, great recessions often saw the largest increase in entrepreneurship of any period. The most prominent case is probably Microsoft, which was founded during the oil embargo recession from 1973 to 1975. Another recent example is the financial crisis of 2008, which gave rise to some of today's big tech companies such as Airbnb and Uber. History thus confirms the thesis that successful companies can also be born in difficult times. This crisis resistance is also reflected in the latest VC report of Startupticker. The report illustrates that investments in Swiss startups were surprisingly robust in 2020 as total investments in startups exceeded CHF 2 billion for the second consecutive year. The interesting question now is, who will be the promising startups from the entrepreneurial class of 2020?
#2 New problems leave room for innovative solutions
While the pandemic killed many businesses, it also triggered the birth of ingenious business ideas from entrepreneurs who were able to adapt to the new circumstances. The covid pandemic has accelerated the digitisation of the nation by leaps and bounds, forcing established companies to rethink the way business is normally done. The Swiss e-commerce sector has skyrocketed by over 50% in the wake of Covid-19, with online grocery shopping tripling since last year (see Statista). The events of 2020 have changed our mindset and priorities faster than ever before. Think about how your own consumption and purchasing behaviour has changed in the past year.
In addition, the crisis has enabled new formats of remote work that open up entirely new market segments and make digital talent more accessible. It is now easier than ever to hire freelancers for your business. This means that companies operating in the online space can potentially reach more clients or talents to join them. As a result, many companies are rethinking the way products are made, and some are considering ways to bring manufacturing back on-site. The fact that remote working is becoming the norm also means that we have more personal time to implement this business idea.
#3 Pent-up demand (the forbidden fruit effect)
Although customer patterns changed drastically during the course of last year, overall consumption in Switzerland remains at a very high level (see Statista). Moreover, there is a huge pent-up demand among consumers who have been waiting to travel, attend concerts and sporting events, or simply eat at their favorite restaurants. At the same time, we believe that some of the new trends that have emerged, such as remote working and leaner workforces, will continue to take hold in the future. Therefore, it will be critical for entrepreneurs to find ways to capitalize on both.
Overall, 2021 should be seen as a year of reorientation, as many companies need to rethink their strategies and consider how they can do things differently than before. It is also a personal fresh start to re-evaluate one's goals and act on them, such as becoming an entrepreneur. Therefore, 2021 might be the best time to take advantage of these opportunities. So if you're already thinking about building your own business, why not start your journey today by applying for the LikeMinded acceleration program powered by Bluelion?