After months of lockdown due to COVID-19, the virus has changed our lives in more ways than we ever imagined. Many of us are now realizing that this new way of life may not be temporary after all. Though many states across the nation have started re-opening businesses, it is unclear what additional requirements these businesses will have to follow. The situation is further complicated by the fact that many small businesses no longer have the cash flow to sustain operations after months of no revenue and have declared bankruptcy. Many customers are also reluctant to go out unless absolutely necessary. This all begs the question, in what ways has the COVID-19 pandemic affected businesses and how, if at all, will these businesses recover?
While most companies have been affected negatively by the pandemic, a handful have emerged stronger than ever. These companies have capitalized on the unique opportunities presented by the pandemic and have stopped at nothing to adapt to the new landscape. One fairly well-known example of this is the popular online conferencing and video sharing company known as Zoom. As of early June 2020, Marketwatch reported that the company’s sales have increased 169% as they achieve record quarterly earnings and that the company’s annual revenue is projected to double. They’ve hit 300 million daily users and their stock price has skyrocketed.
Slack, another corporation specializing in communication and team collaboration, has also seen massive growth with an 80% increase in paid users from the previous quarter. Other industries have also seen a fair amount of success. Beyond Meat, a plant-based meat company, reported that its first-quarter sales were up 141% from last year. Peloton, a company that makes in-home workout products such as treadmills and exercise machines, reported a 66% increase in revenue. These companies have been able to thrive because of their unique positions to be effective for a quarantined society and their ability to adapt.
However, not all companies have experienced the financial success of the ones mentioned above. In fact, most companies and small businesses have suffered losses enough to bring them to the brink of bankruptcy. One of these companies is Airbnb, the online marketplace that allows people to rent out their properties for temporary guests and tourists. The pandemic forced most countries to limit tourism if not outright cancel it, in addition to halting domestic travel. As a result, Airbnb has been hit hard.
“It took us 12 years to build, and we almost lost everything in six weeks”
Brian Chesky, CEO of Airbnb
According to Entrepreneur, Airbnb CEO Brian Chesky believes that “tourism as we know it is over.” That’s a scary thought coming from someone who built a thriving, multi-billion dollar company on the foundation of tourism.
The lack of tourism due to the pandemic has also been devastating for airlines who have reported record losses. According to CNBC, both Delta and United experienced their first quarterly loss in more than five years. This comes during what is generally one of the most lucrative times of the year for airlines and is likely to get worse.
The hotel industry has also taken a major hit. According to McKinsey research, it could take until 2023 for hotels to reach the same occupancy levels as before COVID-19. Many publicly traded hotel companies have experienced their stock prices dipping by 60% or more. All of this is making previously unappealing industries worse. Investors are pessimistic and are more likely to move away from traditional industries in the aftermath of COVID-19. Once global markets stabilize, it’s likely more venture capital and angel investments will be poured into emerging industries, most of which will be digitally-based rather than physical industries.
The best path moving forward seems unclear. Most experts agree that a vaccine for COVID-19 is unlikely to be broadly available until the end of 2021. That’s the best-case scenario. Despite this, many businesses are resuming operations. We will see a second wave of lockdowns as concerns die down but cases still remain strong. Most states have initiated reopening plans but are now questioning the decision. According to BBC, top U.S. disease advisor Dr. Anthony Fauci reported to the U.S. Senate that COVID-19 cases could rise up to 100,000 cases a day if Americans aren’t careful. He further went on to say “Clearly, we are not in control right now” in response to an increased level of comfort demonstrated by businesses and the public. More people are now going out due to businesses reopening, many of whom violate social distancing guidelines. Some businesses have made it mandatory to wear a mask while others have highlighted the fact that they don’t as a marketing stunt.
Beyond customers, businesses also need to think about their employees. Many employees have differing levels of comfort with touching and working alongside their coworkers due to the pandemic. Some service workers and store employees are immunocompromised or live with someone at a higher risk of illness. Others simply cannot afford to get sick. One of the most creative methods of managing risk of contact is colored lanyards. Some companies are now having employees wear their ID badges with colored lanyards that indicate their level of comfort with touching and talking. Green means I’m okay with touching and talking. Yellow means I’m okay with talking from a distance but no touching. Red means I’m not comfortable with either yet. Creative approaches like this can help employees engage at their own discretion and mitigate risk. However, despite the added safety measures, a lot of employees (and companies) prefer the alternative of working from home— until there is a vaccine, any prolonged contact with others can be dangerous
It seems unlikely that businesses will recover their full operations anytime soon, but many will hopefully recover in due time. They will adapt and find new ways of conducting business in an ever-changing landscape. They will have to learn to adapt to the digital environment. Though the pandemic has brought many problems, it may also be the very thing that allows us to build a truly digital society. It’s time for businesses, schools, governments, institutions, etc to adapt. There may never be a better time than today for these organizations to move their activities online. Though this disruption seems unprecedented (which it is in many ways), black swan events have occurred many times throughout history. Businesses are ultimately sustained or destroyed by their ability to adapt to the marketplace. COVID-19 is just another obstacle in the treacherous world of business, and the fittest will survive.
Sidharth Sood is a 17-year-old entrepreneur, inventor, TEDx speaker, and the Founder & CEO of Curiosity, a private space exploration company that works with multi-billion dollar aerospace companies to take humanity to Mars. He’s also involved in commercially developing innovative solutions for the U.S. military and was chosen by the United States Patent & Trademark office to give a speech at Earthx 2019, one of the largest innovation conferences in the nation. He enjoys sharing his opinions on business-related issues and is a contributor for The Independent Post, Medium, and Next Generation Politics.