The Pandemic through Startup Eyes

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Over the last month we’ve been gathering data and stories from our fledglings on how the pandemic is playing out in their country/cities and within their businesses. The results are not good:

The first 57 responses arrived from 25 countries. The fledglings are a very diverse portfolio of startups. The tiny numbers show where there are multiple responses from a single country or city.

Quantitative Data

1 = no change // 10 = massive change
1 = all is normal // 10 = no customers

There is no need to compute an average for either of these questions. Life is greatly if not massively disturbed and all but a few of these business are being stressed.

Two of the companies rating the pandemic as a 1 are not in fact having a normal year. These are two companies in the healthcare space, both of which sold more product in the last two months than in all of 2019. The third was already shut down due to a stroke of luck many years ago, with long-written plans to reopen in 2020.

Most of these companies are outside of the U.S., Europe, and other countries that are subsidizing employment. Almost half have had to lay off staff.

Two of the companies have a staff member who has caught the virus. One is hopefully a mild case, like Fledge’s founder had two months ago.

Do you know personally know anyone who has died? 24% is 14 of 57. That is a surprising answer. Unfortunately, we’re not going to be surprised if this isn’t 90% by this time next year.

One of these companies that has seen death sells milk to hospitals in Tanzania. The drivers at that company do not want to serve those customers right now. They’ve seen rooms of dead bodies and don’t want to go anywhere near the hospitals during this pandemic, good paying customers or not.

Stories

We asked the fledglings what big changes they are seeing?

The farm has been constantly attacked and vandalized once just like any other farming companies. Hunger due to the lockdown has made communities to vandalize farms to earn food.

Churn has sky rocketed. Since customers facilities are under total lockdown, they have deliberately asked to put a halt to the payment terms until Q3 or may be for an entire year!

Food is going to run out along with essential supplies. While the medical front is in the forefront of the pandemic, the food front is forgotten or not attended to by the government. As a result hunger and opportunistic diseases will kill more people than even COVID-19.

The corona has also brought even more poverty and starvation in rural areas.

Food has become expensive in my community.

Our supply chain is disturbed, we import some equipment from South Africa and China and due corona restrictions we are unable to buy such goods.

Farmers have registered high post harvest losses, reduced the amount of cultivated land. On our side, we have recorded a reduction in revenue by 50% and put on hold any expansion plans.

Field operations have been paralysed since early March and no revenue has been generated since.

The founders stopped paying themselves last year and has also made a 50% cut to team’s pay cheques.

Supply chain disruptions, limited availability of raw materials.

Primary clients (restaurants) are closed.

Unfulfilled commitments and no new business.

We are in a total lockdown. No business activities taking place at all. We cannot source materials because we depend on hired transport which is not there. The police is beating people without asking questions.

Lock down is coming. This will require us resorting into deliveries to customers.

Customers no longer have resources.

Border restrictions meaning that non-essential goods are blocked from entering my countries. Airports are closed and airfreight is now virtually impossible. Sales have thus ceased for now.

Ultimately people fear hunger more than another virus.

Not all is bad, one fledgling reports: No change except maybe some growth.

Plus outside this survey we have two fledglings working in healthcare: Shift Labs and Briotech. Both have had the best months ever as their products are useful in the fight against the virus.

Mitigations

We asked the fledglings how they are mitigating the issues they face?

We requested the Inspector General of Police to deploy police personnel to mitigate another attack since the lockdown may continue.

We’ve cut down almost every cost except data and payroll expenses. With payroll expenses, we have implemented at least 30% cut across board

Since lockdown we have started to help villagers slow the spread of COVID-19 by providing portable hand waashing stations made from recycled materials. As a former refugee, I predict people living in refugee camps and crowded urban slums will pay a heavy price. From what I see and hear, no one is doing outreach to slums, and various camps due to lack of resources and manpower.

We see changes in consumption trends. Even when we return to normality and people can go out again, we expect more at-home consumption and are thus getting into the direct-to-consumer business via e-commerce.

To manage our operations, we have taken 50% salary reduction on all full-time employees and stopped any expansion until our revenues reach at least 70%. In addition, we have called off all scheduled farmer trainings.

I am working around the clock to raise funding to get farmers to grow food to feed our own people.

Shifted my customer segments from bulk cooperate customers to individual customers.

No control over this.

We are helping to make animal feeds for our local community to allow them continue raising chicken, which is a cheap source of proteins. We are in the process of working with local chicken farmers to add vegetable growing which our sister company is helping to dry and store.

Doing all I can with the time I have.

Closing the business – it was tough before, tougher going forward.

We have provided information to all of our smallholders, but socially distancing in rural Malawi is impossible due to living conditions. In essence we sit and wait to see what remains of the programme once C-19 has run its course.

We try to stay in contact with our peasant partners by reassuring them that the situation is gradually improving in order to avoid the knockout and give them hope for a better tomorrow.

Opportunities

As they say, never let a crisis go to waste. The fledglings are all entrepreneurs, and when a new, visible problem appears, entrepreneurs notice and find solutions. We ask the fledglings what opportunities they are seeing, and through Africa Eats are aiming to fund some of those in order to mitigate the pandemic as much as we can.

There are plenty of other opportunities to enhance the supply chain of agricultural commodities like indigenous poultry, dry beans and tomatoes from rural areas to feed the urban communities.

We are working with telemedicine projects around vulnerable communities.

There is a flood of labor in markets right now looking for jobs who we can hire for our production.

There is a great business opportunity in selling food to urban centers. All kinds of food from eggs, chicken meat, dried vegetables and dried grains including beans and maize.

We can support the poor and less fortunate in the society by supplying them with food and toiletries. The food from our own production since we having inadequate access to the export market, which is where most of our customers were from.

Customer behaviour is changing. E-commerce is becoming the norm. This is an opportunity.

Ss a logistics company we see the great opportunity to redeploy our infrastructure to allow us distribute other products like fertilizer and seeds.

Yes, though, probably too early to say exactly what.

Recently, we’ve seen that our digitised system gave us an advantage. We were the only organization that was able to continue to process crop insurance for our farmers despite the situation. This might be a good time for us to look at this specific product commercially.

My team and I started building a portable hand washing stations from recycling materials. It cost less $2 to build. I have approached the local government for help, but they don’t have money to support or buy products such as this.

Selling online.

Importing PPE from China and reselling to the local populace.

Sugar has become scarcity and almost 4 times expensive than it was before. This has risen demand for honey.

We have seen increased demand for our organic fertilizer during the pandemic.

As in all difficult situations, there are always opportunities, in our case it is to be able to mobilize all the production at very attractive costs and secure it before the borders are reopened and business resumes. This will not only allow farmers to have additional income to be able to cope with confinement and above all to shelter from a real food crisis

If you watch the site visit videos from 2019, Chicken Basket stood out as the one company that never misses an opportunity to showcase their brand. Their mitigation is totally in line with that ethos: We have introduced free mask to everyone who buys our chicken or products and the masks are branded chicken basket.

A Health AND Hunger Crisis

A lot of the fledglings are in the food/agriculture sector. Despite that being the most essential service, that sector is clearly the most impacted by the pandemic. What we’re seeing is a breakdown of the food supply chain, both in the United States as well as in Africa and Asia, and that could cause far more deaths than the virus itself.

Fledge’s mitigation to this coming hunger crisis is Africa Eats. That spin-off is raising philanthropic capital through our partner Realize Impact. You can read more details about how that works over on the Realize Impact website.

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