COVID-19: Four important lessons from European startups

COVID-19: Four important lessons from European startups

In the seven months since hitting Europe, and recently surpassing 25 million cases globally, COVID-19 has profoundly affected people and businesses across the continent. 

As part of our annual survey, we asked startups how the pandemic and the lockdowns affected their operations and outlook.

We launched our survey in June 2020 and it is still open. If you haven’t done so yet, we invite you to take the survey and help us map and share important trends for the European startup ecosystem.

In the meantime we’re already sharing some of the preliminary findings from more than 300 respondents from the European startup ecosystem. Here are four important lessons from European startups on COVID-19.

1) COVID-19: Germany voted best crisis manager by startups

Among startups, Germany enjoys a good reputation when it comes to crisis management and resilience in the ongoing COVID-19 crisis with nearly half of all votes. Of course, this statistic is based on opinion and has to be considered in context with other indicators such as excess mortality).

2) Better don't plan major offline conferences before 2021

As many international tech conferences have been cancelled, rescheduled or moved to all-online formats, we asked startups when they would feel comfortable to go back to one. Something we think important to consider by organizers: Nearly half of all respondents, 47,7%, would rather not attend a major tech event in person before 2021.

In addition, the survey takers rely on a number of important factors for their decision on whether to attend a major conference. Leading factors are the infection rate in the country where the event would take place (53,8%) and whether the trip would be really necessary for the attendant´s business (52,9%).

3) Offline is not dead

While in-person conferences and events obviously struggle at the moment, startups are not forgetting how important it is to create meaningful and personal networks. 

Generally, 3 out of 4 startups rely on strong international networks. COVID-19 is threatening these networks: Although a considerable share of more than 30% feels unaffected, almost 40% of startups agree that it is harder for them to connect to international investors and clients due to the pandemic.

Despite the rise of virtual event and interaction formats, startups are well aware of their limitations, especially when doing business internationally. Only 30% of startups are convinced that virtual meetings are equally valuable as in-person meetings.

If offline meetings are not possible, then what channels are preferred by startups to maintain valuable international contacts? Our results show that innovative offerings, like virtual conferences or platforms – many of them piloted as a quick response to the lockdown – are not yet very popular with startups. More than half of respondents prefer traditional ways of making contacts, like their personal networks and LinkedIn.

4) Some startups are thriving internationally

COVID-19 has profound negative effects across many sectors of society and economy. Yet some industries, including Ecommerce, Health tech and video conferencing, have accelerated as a consequence of the lockdown. Despite such industry-specific opportunities, startups are affected by the difficulty to interact across borders and expand to international markets due to the lockdown and travel restrictions. Our data shows that nearly half of startups had to slow down their internationalization due to COVID-19, whereas almost one in five startups managed to expand internationally even faster. 

These discrepancies between struggling and thriving are also mirrored by the fact that while 36 percent of startups have experienced negative effects in making cross-border connections, nearly two thirds of startups are not affected or have even benefited due to COVID-19.

Considering that so far not even a single startup had to close down international locations due to coronavirus, there seems to be hope that the overall situation gets better soon.