Engaging Startups in COVID-19 Crisis Response

How COVID-19 Startups Can Boost the Economy Further
Laís de Oliveira
on May 21, 2020

“The culture of, and approach to, doing business in Silicon Valley was profoundly shaped by the pioneering firms in the early decades of the twentieth century.” - Josh Learner, Boulevard of Broken Dreams

World War I started with swords and horses, and ended with aircrafts over the battlefields. Wartime has long been known to speed up innovation.

COVID-19 has cracked our global system, putting to the test our healthcare system, infrastructure, sense of community and many other factors. Amidst multiple layers of issues brought up by COVID-19, it has also put the spotlight on the power of startups as fast-moving vehicles to accelerate solutions to this crisis (and beyond).

Public Sector has a key role to play in engaging startups to create solutions during critical times, with the head of the innovation or digital agencies being called to act convener, broker, and matchmaker. The ripple effect of these actions is important, as can produce benefits well beyond this crisis, accelerating local economies in the aftermath. Bearing in mind the potential of startups to fix current issues and future economies, let’s take a look into:

  1. The set of problems we must solve as a local, national and global startup ecosystem
  2. Examples of communities are activating startups to solve COVID-19 related issues
  3. How the government can support this process

Starting From the Problem
“It’s the end of the world as we know it”

Had you read the news today in the beginning of this year, you’d probably not believe it. Today we know we were not prepared for most of the problems we have to solve today.

Shortage in medical facilities and healthcare supplies. Gaps in our basic needs supply chain. Unprepared networks infrastructure. Aggravation of mental health and loneliness derived issues due to social isolation. Financial instability, scarcity and borderline starvation, starting at the most vulnerable segments of society. These are just some from the growing list of issues deriving from the COVID-19 crisis.

While some issues demand temporary solutions, others are likely to change the way we live forever (e.g. remote work and online education). In China, where they recently (April 7th) hit the first day with no COVID-19 related death records, it is already about the “new normal”.

There is no “going back to what it used to be.” From now and on, it’s about the new normal Utmost, all issues demand immediate and fast response. That’s startup territory.

Startups Are Standing Up to Help Across the World
According to our initial survey, 96% of startups declared to continue working during the crisis, even if there is significant disruption. This insight aligns with the historical analysis of the previous crisis, where smaller firms proved to be more equipped to react to change than larger companies. Read insights from our survey filled up by thousands of founders globally in the report “The Impact of COVID-19 on Global Startup Ecosystems: Global Startup Survey.”

Although many startups around the world are stepping up to solve a myriad of COVID-19 derived issues - from healthcare related ones (diagnosis, prevention, treatment) to the impact of social isolation (remote work, supply chain and logistics, mental health) - it is still too soon to mention examples of those which have proven to be a needle mover in this cause. What we do know is that activating startups for fast response is crucial. As our report states, startups are “uniquely situated to continue operating even in lockdown scenarios.” 

The next paragraphs bring a few key examples of how local community initiatives - from private to public initiative - are working to coordinate efforts and bring startups together to fight against COVID-19, organizing efforts to help local startups in creating solutions.

Assembling the Startup Community for Fast Response
Startup community groups started buzzing, new groups emerging to focus on specific verticals and soon, results would show up. Out of the burst of ideas and need for solutions amidst uncertainty, one of the first things to emerge were lists and directories to help connect and promote fast-emerging initiatives.

In India, initiated by one of its largest coworking spaces, the website Startups vs COVID-19 lists solutions from Funding Opportunities and Programs to a growing list of Startups classified according to location, category of support, area of focus and state of development. In Israel, a similar solution was elegantly implemented on the existing Startup Nation Central website, by adding a COVID-19 layer to their existing website in the shape of a “coronavirus” tag, updating their directory with over a hundred of technology based companies offering healthcare solutions to the crisis.

In Brazil, a twin initiative was created under the hashtag #startupsvscovid19: a vast startup directory website emerged as a fast response from an WhatsApp group under the same name (driven by the Brazilian Association of Startups and local communities gathered by The initiative is currently supported by the Ministry of Economy of Brazil, who listened to 10 startups offering groundbreaking solutions to this crisis at a COVID-19 specific DemoDay.

Finally, several hackathons took place to find new solutions for emerging, unexpected issues. Germany hosted nearly 43,000 participants in a record-breaking hackathon led by a consortium of local communities. Across the Ocean, the Calgary Innovation Coalition (Edmonton’s community based initiative) started CODEVID-19, an ongoing initiative to support startups coming up with new technologies through an ongoing hackathon which awards participants on a weekly basis, until the final prize. 

Finally, on a global level our partner Hello Tomorrow has listed globally leading startups solving key issues in the Deep Tech sector.

As put by Josh Lerner in his book Boulevard of Broken Dreams, “small firms did not invent the key genetic engineering techniques or Internet protocols. Rather, the enabling technologies were developed with government funds at academic institutions and research laboratories. It was the small entrants, however, who first seized upon the commercial opportunities.”

In a nutshell, an ecosystem-wide collaboration is required. 

How Government Can Help Startups
While startups can be crucial actors, the Public Sector must do more than provide these with fuel to continue growing and finding solutions. But there’s more to it than grants and temporary tax reliefs. In a recent article written by our Advisor Dan Herman, “policy makers can play a significant role in mitigating the evaporation of organic consumer demand by ramping up efforts to procure in a trade-permissible fashion from innovative domestic companies.”

In our most recent Report, “Governments, Don’t Let your Startups and Scaleups Die: The Importance of Well-Designed Funding Policy in Times of Crisis,” our team concluded that Public support through policymaking should take shape based on 5 principles:

  1. Design for Immediate Flow of Government Money to Startups
  2. Do Not Expect VC firms to Lead and Spread the Money
  3. Do Not Create a New Instrument or Trigger New Terms 
  4. Provide Great Flexibility in Terms of Use of Funds
  5. Align Investor Incentives with Those of the Government

In our next articles, we will continue to share insights on how the public sector can play a crucial role in helping startups grow through (and beyond) this crisis. Meanwhile, learn from the results of our COVID-19 survey with founders around the world and stay in tune for more insights from our team and experts network on our blog.

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