Lessons from the Most Bipolar Year of Our LivesBy Vincent Speranza | Tue, 03/02/2021 - 13:05
Why is 2020 the most bipolar year we have lived? A few days ago, I spoke with a famous offline brand selected by Endeavor in 2004. The past year has been very hard for his business because his shops and workshops have been closed for many months and his people are unable to work. For him and many others with the same characteristics, the role as a leader is more complex now than ever. We are trying to help them on cash flow strategy and the protection of their employees but lately, I'd say the accompaniment is more for encouragement, support, and mental health.
Then again, we are celebrating an amazing round of investments, acquisitions, and exponential growth for digital-native companies selected in the last eight months by Endeavor. Digital native businesses are bursting and those resources will help them grow even more.
That's how disparate 2020 was for the Mexican business sector. For certain industries, the crisis has affected operations and value chains, while for others, it was the year when opportunities, exponential growth, and positive numbers exploded.
Sadly, the highest proportion of entrepreneurs falls into the first group, which has led to a rise in unemployment never seen before, low or no profits, and a dramatic closure of companies, which ultimately has had a very negative impact on the country's economy.
Our report, “Entrepreneurial Ecosystem Reshuffle: Challenges & Opportunities in the Post-COVID-19 World,” revealed the seriousness of the situation. Mexico’s GDP contracted by 18.9 percent in the second quarter compared to 2019, the sharpest decline on record. Every hour, seven companies shut down permanently, and 1,366 people enter poverty. If we add to that the human losses and vulnerability that we all experience, the future looks very complicated.
That is why I believe that, in this tragic scenario, it is worth highlighting the lessons from this pandemic to remind us that, even in the worst moments, resilience and adaptability are the abilities that will help us to get ahead.
Five Reflections on Life and Business in a Pandemic
Here are five lessons that I have reflected on in these months of confinement, in one of the craziest years of my life.
1. Living through this crisis has forced us all to reinvent. We had to pause and we were given the opportunity for introspection. We moved away from routines and changed our work dynamics. And now, we think much more about our physical, emotional and spiritual well-being, and about taking time for ourselves and our family. From a humanity point of view, this is something very positive.
We also became more aware of caring for the planet, because we realized what happens when we let the world take a break.
Companies also had a moment of thought: they went back to their roots to remember their true purpose, and they have strived to put the customer at the center of their actions again. This is very powerful for the market.
2. We will not return to how it was before. Today more than ever, digital is here to stay. Certain sectors were reluctant to make the transition. But COVID-19 and the restrictive measures to contain it put the digital transformation on steroids as the change was necessary to survive. Our report revealed that six out of 10 SMEs today sell their products via the internet, 94.6 percent more than in 2019.
Aside from the advantages of the tech entrepreneurial scene, I consider that the fact that they have taken us out of our comfort zone is a very positive thing. Because when you get used to a way of doing things and nobody challenges you, you get stuck and you are unable to grow.
3. Our habits were also transformed, which impacted businesses and their collateral value chains. For example, the fact that more people are making online purchases also means more digital transactions; that is, more cards processed and delivered, and a greater banking penetration. Also, an increase in delivery services and the phenomenon of the sharing economy.
Another example: public transportation means a health risk due to crowds. The alternative: acquire a car, if not new, then a used one. This explains the exponential growth of the Endeavor company Kavak, an online platform that sells second-hand cars, which had exponential growth in 2020. The graph is amazing, it does not show a curve, but a vertical increment.
4. The way we work also evolved during 2020. Although we lack many things when working remotely, especially in terms of social contact, in the end, the scheme works for many sectors.
This will lead us to completely rethink how we live in the future. We will no longer waste time in traffic because many of us will be able to connect to do our work, or we will not have to go to an office every day (Endeavor itself will have a different work cycle now). I see decongested streets, activities will no longer be centralized in large cities because it will be possible to work from anywhere, and that will increase the level of well-being for everyone. The post-COVID world is going to be very different. There will be a period of adaptation but, without a doubt, it will change a lot.
5. Unicorns are no longer mythology for the entrepreneurial scene in Mexico because in October 2020 we saw the birth of the first local unicorn startup: Kavak. Endeavor was a first-rate witness, as its three founders are Endeavor Entrepreneurs.
This confirms that companies born digitally and leveraged on technology; designed for the customer, or even obsessed with serving them; and that are always in search of new and better proposals for the changing conditions, are the ones that are having a lot of success and relevance in this new world.
The Biggest Lesson: There Is No Better Time Than Now
In March of last year, entrepreneurs entered survival mode. They were defensive, took precautions, cut expenses, and rethought their goals. But in 2021, many went into attack mode.
They already understood that the change was not momentary but permanent. Now they must determine how to land their strategies and efforts for this new reality, to take advantage of the fact that dominant players are slower to assimilate changes and make decisions. They also acquired great talent that other companies left behind.
Investment funds got it very well. They said, Hey entrepreneur, your thesis is valid, your answer is correct, your value proposition is congruent. This explains all the investment rounds that came out in the last quarter of the year. And the best thing is that right now, there is a great deployment of resources.
All this leads me to think that everything is ready. Entrepreneurs are formatted again. The consumer is willing. The market is about to take off. Technology has already proven that it solves many problems. And the talent is back in action. Then, let’s go!
I am very optimistic. Amazing things are coming in the post-COVID world. And it will be a much better world, as long as we don't forget the lessons learned from the craziest year of our lives.