Startup founders help each other weather the COVID-19 crisis

Anna (a pseudonym), a startup founder in the Montréal area, went through an emotional rollercoaster ride that’s familiar to us all since the onset of the COVID-19 pandemic. At first she tried to stay positive and keep a stiff upper lip. And then she slumped, and thought to herself: “Oh my God, this is horrible; this is never going to end.”

The pandemic has had a devastating impact on small businesses. A June survey by the Canadian Federation of Independent Business finds that 49 per cent of Canadian small businesses are either fully closed or only partially open, 46 per cent are making half or less of their normal sales and a third are using half or less of their staff.

For entrepreneurs like Anna who were just getting their businesses off the ground — developing their product, looking for investors and finding their first customers — the challenges are even more daunting.

So how are new startups weathering the storm?

Building a sense of community

For the past three months as part of a larger study, our team has organized bi-weekly group conversations on Zoom with a dozen entrepreneurs.

These conversations have led to an exchange of information, but equally importantly, we found they helped entrepreneurs build a sense of community. As Anna said in our interview:

“Talking to fellow founders, hearing the trials and tribulations, it’s just good to vent some of this out … so people can have a sense of community and support.”

In our conversations, entrepreneurs discussed new challenges they were facing, which Benoit (a pseudonym) described as “going back to square one.” For some, online retail was the only way to save their businesses, but they lacked e-commerce experience.

How do you hire a photographer to take pictures of your products under a lockdown? How do you replace in-person customer training with educational videos? What are the best channels for advertising your product? And how do you do all of this while reducing your operating expenses?

We also found that entrepreneurs needed information about new opportunities. For example, in response to the pandemic, the Canadian government has implemented a number of programs for the startup sector, including financial support for small businesses. In our group conversations, entrepreneurs readily shared information about what programs were available, how to apply and who to contact.

Entrepreneurs also had concerns about managing their teams when the traditional office life is, for now anyway, a thing of the past. How do you bring on new hires when you cannot meet with them in person? How do you maintain team morale when everyone is working remotely? How do you organize collaboration online?

Sharing expertise

Information sharing was not the only benefit entrepreneurs derived from group conversations. We noticed that even entrepreneurs who said, in interviews, that they hadn’t derived much new information from meetings seemed to enjoy sharing their expertise with others, and still occasionally dropped into our Zoom chats.

We found that our group conversations about the experience of going through this exceptional time together helped entrepreneurs feel less alone. One participant, Rodrigo (a pseudonym), was “very happy to see how [other entrepreneurs] are doing and that they’re keeping up and they’re hanging in there; that’s always very inspiring.”

Nina (a pseudonym) said she found it “useful to see that there are actually some startups that are in the same boat as us …. Because we look at social media and there are some industries that are booming and it doesn’t make you feel very good when you’re not.”

Through the interviews, we realized that group conversations originally intended to share information about the rapidly changing business landscape had in fact created openings for deeper interpersonal interactions between members. Following meetings, entrepreneurs described reaching out to their peers for followup advice and guidance, and sometimes just to offer personal encouragement.

Creating trust

Why were our group conversations able to evolve from an information exchange to a community-building platform?

For starters, entrepreneurs came from different industries and were not directly competing with each other. This made them feel less constrained in giving advice and in openly discussing the challenges they were facing.

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Another important reason was that all entrepreneurs personally knew the group facilitator, Renjie Butalid, and many had previously participated in programs at McGill’s Dobson Centre for Entrepreneurship. In this way, the groups’ success was predicated on the pre-existing face-to-face relationships that helped foster trust.

While our study continues, our results point so far to the important role peer relationships play in helping entrepreneurs get through the current crisis. They also suggest that universities can help entrepreneurs build peer relationships. And these relationships play a critical role in building a resilient entrepreneurial ecosystem.

Renjie Butalid, co-founder of the Montreal AI Ethics Institute, contributed to this article.

Elena Obukhova, Assistant Professor, Strategy and Organization, McGill University and Daphne Demetry, Assistant Professor, Strategy and Organization, McGill University

This article is republished from The Conversation under a Creative Commons license. Read the original article.