There is no arguing the Coronavirus pandemic has been detrimental to the current economy–some may even argue it was worse than the 2008 Financial Crisis. However, while the drop in GDP and spike in the unemployment rate show the damaging effects of Coronavirus, there has been one positive effect of the Coronavirus on the economy: the increase of entrepreneurs.
The sudden increase in the unemployment rate left thousands of Americans without jobs, in addition to the thousands of Americans with decreased wages. Although the increase in unemployment may have discouraged some, others took this excess time as an opportunity to pursue their passions and create startups.
From mid-March to the end of May alone, there were more than 500,000 applications for an employer identification number, and between mid-March and mid-April, the Small Business Administration issued almost 300 start-up loans worth approximately $153 million. Furthermore, Stripe, a payment processing firm, claims to have handled more than $1 billion in sales for businesses started on the platform during the same time.
Some people might find this sudden spike in startups perplexing. It begs the questions: with such little confidence in the economy at the moment, why is right now the perfect time to become an entrepreneur?
1. Quarantine has created a completely new, undiscovered market.
The complete and sudden change in our day-to-day lives created a new market, and entrepreneurs are determined to take advantage of this untouched market. This surge of new, innovative entrepreneurs are now focused on ways to improve community hygiene and help people adapt to life at home in quarantine.
The masses of entrepreneurs have stepped in and seemingly thought of every possible way to keep life going at home. Whether it’s improving hygiene with contactless grocery delivery services or adapting to gym closures with at-home workout classes, these entrepreneurs have taken advantage of the new normal with life at home.
Take Peloton for example, a company that makes bikes and treadmills with live-streamed and on-demand classes for in-home workouts. While Peloton was founded long before the Coronavirus outbreak, they took advantage of the gym closures, expanding their inventory and services during the start of the pandemic, and they started seeing results to match: revenue grew 66% and app membership rose 30%.
Outside of just the in-home workout industry, these entrepreneurs have seemingly thought of a way to accommodate supplying any product and service to the comfort of one’s home, a new necessity in daily life.
2. Working for yourself allows you to take control of your source of income.
After receiving layoffs and wage cuts during the Coronavirus pandemic, many people have decided to take control of their sources of income by choosing to work for themselves. Instead of having the uncertainty of their employers potentially cutting their wages or even laying them off, many people have taken this opportunity to follow something they are passionate about.
With so much uncertainty in so many people’s current situations, it seems that there isn’t as big a risk to create a startup right now. If there’s a chance of getting fired or receiving wage cuts anyways, why not take this opportunity to pursue something you’re actually interested in that could make you money?
In addition to no longer having to rely on someone else for your income, working for yourself allows for a more flexible schedule. Although creating a business from the ground up can prove much more time-consuming than a regular nine-to-five job, you get the freedom to choose your hours, and the time spent will arguably be much more enjoyable if you’re actually interested in what you’re pursuing.
3. There’s no better time to pursue something you’re passionate about.
With so much change happening in the world, right now is the perfect time for a career change. With all the excess time in Quarantine, it’s clear that people are eager to begin following their passions through their startups, instead of working at something they aren’t excited about.
Most people associate startups with risk; however, right now, it seems that there are risks in all aspects of the economy, including what people once thought of as stable nine-to-five jobs. While this new, possibly uncertain economic future may be interpreted as a downside, it can also prove promising as people begin to pursue their interests and become entrepreneurs to hopefully make an impact in this new world through their startups.
If you’re interested in reading more about entrepreneurs during the Coronavirus pandemic, check out the article, A Young Entrepreneur on the Rise Taking Advantage of Her Time in Quarantine, about a high school student’s journey with her clothing start-up.
If you like this article, check out our podcast episodes: Hashem Montasser – Build Your Passion Project and Marjorie Gubelmann – Turn Your Passion Into Your Job