COVID-19 — Effects on the Startup Ecosystem in Switzerland
How a startup company is dealing with the crisis
On 24 March 2020 Stefan Huber, Founder & Managing Director of StoryUp GmbH and how2 AG, has been interviewed. He tells us how the coronavirus affects his startup company and how he deals with the current situation.
The coronavirus outbreak is first and foremost a human tragedy that affects hundreds of thousands of people. COVID-19 has the world firmly in its grip. But the virus not only threatens health, but it also has an increasing impact on the economy. Major disruptions are caused in public markets, companies are withdrawing from conferences and traveling is restricted.
Many companies are urging workers to stay at home and investors are now urging start-ups and other companies to prepare accordingly. Founders all over Switzerland are asking themselves the question of how to go on. In addition to medium-term financing, attention is being focused on daily costs and cash flow. Founder Stefan Huber shares his learning and crisis rules.
How has the COVID-19 situation affected your business?
Stefan Huber: Our company StoryUp GmbH advises clients on all aspects of digital storytelling, conducts workshops, produces social videos and explanatory films. We had high demand and many clients with new requests, but due to the corona virus many orders were cancelled or postponed indefinitely. We are also currently preparing my other company, an «Explanatory Video Agency» how2 AG, in Germany, for restless weeks and months. We try to make the best out of it. In the first weeks of March, I took the time to create a worst-case plan to analyze the current situation and to prepare myself. Then, act accordingly to the situation. I had already experienced a crisis as a founder in 2008 and was sensitized early with such crisis.
«I took the time to create a worst-case plan to analyze the current situation and to prepare myself.»
What were the worst consequences for your company?
Larger video productions were cancelled or postponed indefinitely. Almost all presence workshops were cancelled. I had many bookings in Germany and Switzerland. Now we are switching completely to webinars, but for the time being we are not paying for them. We also try to get involved on a voluntary basis and support initiatives like Belocalhero.com in order to help the hard-hit local businesses. Webinars for SMEs and start-ups are coming out soon, we are currently developing them at full speed.
After the Financial Crisis in 2008, I set up a few rules for myself on how to manage a crisis:
1. The first priority is health and family. It is about freeing your mind and continuing to work. Only if you and your family are doing fine, you have the strength to create something new. At the moment I regularly go for walks and go jogging. At home we also take turns with babysitting. It is going well.
2. An honest worst-case plan is very helpful during a crisis. It describes different scenarios and gives me a clear picture regarding finances and liquidity. It is important that entrepreneurs are honest with themselves now. Talking things up does not help much in this situation. My worst-case plan is based on the assumption that we will not return to the state we were in before the crisis in 2020. From now on, I will be positively surprised if there are quick solutions.
3. Entrepreneurs should quickly form a rescue parachute as far as possible. I am aware that this is currently not easy for many start-ups and SMEs. This is a very difficult time. We have reduced the costs for my Winterthur company StoryUp GmbH to a minimum and for my company in Munich with 20 permanent employees, we have prepared everything regarding short-time work and credit to secure the company.
4. We now operate according to the «Lean Startup principle» of Eric Ries: Generate ideas, run tests, find out where the demand is evolving and thus develop new business models step by step. I am sure that the current business will be continued after the crisis. We should not only deal with negative topics, but defend the existing business. We should consider the situation as an opportunity to come up with innovative ideas, test and implement new complementary business models into our already existing business. Entrepreneurs must now look ahead.
Keyword “New Work”: What is your position on home office and virtual meetings?
Before I moved to the «Home of Innovation» (co-working space in Switzerland), I worked in a home office for more than one and a half years and I am used to it. You should maintain a work ritual. The best way to do this is with a routine that you establish and get used to. It is important that we can separate our private life from our business life and work at home in a disciplined manner. It will be difficult in the long term, but we should all simply do our best to adapt to the situation. We use tools such as hangouts, zoom and conduct all workshops and meetings virtually. It works well.
«You should maintain a work ritual. The best way to do this, is with a routine that you establish and get used to.»
Despite the negative impacts, are there any positive aspects of the virus that you see?
- Better understanding of digitalization.
On the one hand, the virus has brought a clear change in thinking. You have the chance to generate a new business or optimize your existing one. On the other hand, solidarity is strengthened. People help each other and society develops a stronger awareness. We have long lived in a form of «Late Roman Decadence»: Party, luxury, Insta-Selfies, etc. We have lost the awareness of the important things and about the things that really matters. I hope that with this massive experience this will change for the better.
«The virus has brought a clear change in Thinking. You have the chance to generate a New Business or Optimize your existing one.»
What things will you change after the crisis in your business?
Topic Blended Learning. Webinars will complement the presence workshops in the future. This will be a matter of course for everyone. Currently, as an InnoSuisse Coach, I am in the process of advising many startups on tools, such as Hangouts or Zoom. It works well, but it will not replace the presence workshops in a Co-Working Space 100%.
The crisis forces me, as well as many other entrepreneurs, to develop new models faster. I am very confident for the year 2021. Then we will really take off!
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Acknowledgement of thanks
Thank you again Stefan Huber for your interview, giving us an interesting insight into your startup during the current situation. We hope all the best for a better future.