During last week’s webinar, “Start-ups and scale-ups: benefits of an entrepreneurial mindset?”, our academic director Prof. dr. Justin Jansen and Dr. Ingrid Verheul from Rotterdam School of Management, Erasmus University (RSM) shared important insights about how we can learn from startups and scaleups in order to survive the Coronacrisis.

Although every crisis presents challenges and opportunities, the current one that we are facing is certainly a very different one. Overnight, as soon as the WHO declared the Coronavirus to be a global pandemic, nationwide lockdowns were immediately implemented, which resulted in an abrupt fall in global demand. It was a shocking surprise to any company, no matter how big or small and no matter what sector.

Regardless of being a large established company or a young startup or scaleup, companies had to react to ensure their survival. The companies that have reacted using an entrepreneurial mindset have shown to be more resilient.

Benefits of an entrepreneurial mindset for startups and scaleups

Where larger companies have resources in their favour, smaller startups and scaleups have flexibility. Being lean is a key characteristic of startups and scaleups that can benefit them during the crisis. The flexibility of startups and scaleups, specifically during this crisis, is clear in those that already had space in their business models to incorporate online channels, decentralised teams and remote work. Their resilience is demonstrated in the fact that the majority of startups and scaleups could continue their operations from home as soon as the crisis hit.

The startups and scaleups that have survived, and even thrived, during the crisis used Entrepreneurial Bricolage to cope with uncertainty. Entrepreneurial Bricolage is defined as “making do by applying combinations of the resources at hand to new problems and opportunities”.[1] To make up for their lack of resources, when compared to larger companies, startups and scaleups should leverage the power of collaborations and use their network to call for external resources. They must reach out to their network and look for the support measures from the government and for funding that is still available.

Bigger companies can also benefit from an entrepreneurial mindset

The go-to strategy for big companies during crises seems to be scaling down. However, scaling down on the one hand can also mean scaling up on the other hand. There is a fine line between choosing to pivot or choosing to let go. Instead of just scaling down during the crisis, larger companies can support their employees, who have great ideas that can’t fit in the current company strategy, to start their own businesses.

Essentially, this means supporting the creation of spinouts to allocate resources more efficiently. For example, Rituals, one of the long standing Top250 Scaleups [3] ranked in the Top 3, started as a spinout of Unilever. Now they are one of the fastest-growing companies in the Netherlands!

Having a positive entrepreneurial mindset pays off

With the impending global recession, it is difficult to have a positive outlook. Yet, having a positive mindset has actually led to the growth of many startups and scaleups. The Coronacrisis has brought about a lot more opportunities for startups and scaleups to come up with new value propositions for changing customer demand. For example, we have already seen an acceleration of:

• Remote work and online communication tools
• Digital healthcare solutions and medical technologies
• Circular economy solutions

Words of advice from the experts on how to cope with uncertainty

Dr Ingrid Verheul: “Experimentation is the core of an entrepreneurial mindset.” Her advice is therefore to try out different things and to not focus on making long-term plans to develop a perfect product. Instead, try to develop something cheaply and fast, test it in the market, get feedback and adapt. The key is to build flexibility into the system at these early stages.

Prof. dr. Justin Jansen: “Don’t underestimate your network”. His advice is therefore to collaborate. By seeing what others are doing and how they are trying to cope with the situation, startups and scaleups can learn valuable lessons and foster valuable relationships in their ecosystem. These collaborations can even be with bigger, more established, firms that have a history and experience to learn from.

Curious about the startups and scaleups in your region and how they are handling the crisis? Monitor your startups and scaleups and how they make use of the innovation ecosystem in times of crisis! Contact our research team: research@ece.nl and check out our research: https://ece.nl/research/

[1] Baker, T., & Nelson, R. E. (2005). Creating something from nothing: Resource construction through entrepreneurial bricolage. Administrative science quarterly, 50(3), 329-366.

[2] See our research on knowledge-intensive startups for additional insights about spinoffs and spinouts.

[3] Read about how the Top 250 2020 scale-ups cope with the Corona-crisis.