How 3 Startups Managed to Drive Business Growth During COVID-19
At the onset of the coronavirus pandemic, amid stay-at-home orders across the country, Startup Genome released a report in April showing that, of 1,070 startups surveyed worldwide, 65 percent indicated they would run out of money by October of 2020. And since the pandemic escalated in March, over 100,000 small businesses were projected to have permanently shut down, according to a National Bureau of Economic Research working paper released a month later.
Without a doubt, this crisis has forced executives all over the country to make tough calls, from salary cuts to layoffs and furloughs. But not all businesses have gone into crisis mode.
Here, we examine three startups at different stages in different industries that share one envious trait: business growth during COVID-19.
The Series B Unicorn With a Well-Timed Solution
At the end of November of 2019, Automation Anywhere raised $290 million in series B funding, a few months before the pandemic hit the United States. When the round closed, chairman and CEO Mihir Shukla stated in a press release that the new funds would help the company empower clients “to achieve greater business agility and increased efficiencies by automating end-to-end business processes.”
Founded in 2003, Automation Anywhere is a trailblazer in the robotic process automation (RPA) space. Their platform employs several software bots that are designed to automate processes in a broad number of industries, ranging from manufacturing to healthcare to financial services and more. Given the widespread downsizing, the stay-at-home orders, and the unprecedented move toward fully remote workforces, the company was uniquely positioned to grow as many companies looked for solutions to mitigate their business impact from COVID-19. Take, for example, the need for call center alternatives as physical locations were forced to shut down.
In the case of Automation Anywhere, the global pandemic pushed the company to accelerate its timeline for cloud and hybrid-cloud options. In order to refocus the business during COVID-19, the company announced a workforce reduction to accommodate the restructure.
At the same time, the company introduced a two-pronged approach to the pandemic. First, it provided a free “community edition” of its RPA bots to assist individuals and businesses needing help transitioning to a remote workforce. These free bots have functions that range from relatively simple (like their Slack notification bot) to complex (the “remote workforce asset inventory management” bot).
Second, the company introduced customer use cases on its website to highlight how its product offerings were being leveraged during the pandemic. These clear examples of how bots were being utilized served a key purpose: to demonstrate their value while showcasing their ease of implementation for tech-averse individuals.
These tactical moves proved to be an effective strategy, as Automation Anywhere retained its position as a market leader in the RPA space, making G2 Crowd’s list of Best Software Companies 2020 (at 17), and ranking fifth in the category of fastest growing product at the end of June.
The Series A Startup Doubling Down on Client Relationships
Luxury Presence is a SaaS startup in the real estate vertical offering website services and marketing solutions to agents and brokers. Founded in 2015, the company announced $5.4 million in series A funding in January. With many individuals and companies cutting unnecessary expenses, cancellations and losses were expected to increase for subscription-based business models at the start of the pandemic. For that reason, it is noteworthy that Luxury Presence, according to its Head of People Mark MacDonald, has sustained growth and is actively hiring.
CEO Malte Kramer, in an interview with me, stressed the need to continue providing solutions for clients, even if it meant offering advice and recommendations to prospects that may not immediately benefit the company. He also emphasized that long-term relationships and trust would ultimately propel the business.
With the timing of coronavirus affecting the spring market, typically the busiest time of year for buyers and sellers in real estate, Luxury Presence placed its efforts in educating its client base on utilizing its websites to engage with prospective home buyers and sellers. The unprecedented situation created an opportunity for many agents and brokers to revisit its digital and virtual services, which the company, as a B2B service in a relatively dated industry, utilized to its advantage.
Additionally, in an effort to reduce the negative impact for its clients, Luxury Presence quickly adjusted its product offerings to accommodate new social distancing regulations. It introduced a la carte solutions, said Kramer, such as one-page add-ons for virtual agent services and modules specific for digital open houses. This combination of empathy and adaptability is a strategy that seems to have paid off: Kramer shared that Luxury Presence hit record new sales in June.
The Bootstrapped Team Optimizing Prospecting Costs
For many entrepreneurs, a global pandemic striking in the first year of a new venture might prove devastating. For airSales, a pre-seed startup offering enterprise-level prospecting by way of virtual sales representatives, COVID-19 may have actually accelerated the growth of the company.
There is no doubt that sales is the bloodline of any business. In comparison to the average salary of an in-house sales representative, a virtual sales rep is a fraction of that cost, without any of the inherent training expenses. Whether clients are looking to drive growth or stay afloat, virtual solutions are trending in every vertical, particularly as remote workforces become the norm. And when it comes to cost optimizations, airSales offers an alternative to traditional lead generation solutions through its streamlined prospecting services. Additionally, the company’s month-to-month billing plans make it particularly attractive for businesses looking for a temporary solution to offset the current economic downturn.
CEO Jeremy Camilloni, who founded the business in 2019, told me that he was initially worried that there would be pandemic-related losses. Instead, the company received an influx of referrals for new business, all coming from its existing client base. By the end of July, according to Camilloni, monthly recurring revenue had increased by 217 percent in four months. He credited the monthly business pricing model for some of the success, noting that the lack of contractual obligations made it an easy decision for new clients to sign up for the service and test a virtual sales force.
The Bottom Line
Across the board, trends are in favor of companies placing an emphasis on digital and virtual service offerings. COVID-19 has forced businesses to reconsider previous non-negotiables, such as working remotely. Soon enough, the conversation may be centered around which roles are needed and that can’t be fulfilled by software. While that’s still far off, with AI and other technologies developing, there are ways to mitigate general business risk by transitioning to virtual or automated services wherever possible.
At the enterprise level, intelligent automation leveraging machine learning could make sense. However, for mid-level or small businesses, the infrastructure may not be in place to support large-scale automation. This is where it makes more sense to tap into services that offer a hybrid of virtual and automated solutions.