Startups in times of crisis – A rapid response to the COVID-19 pandemic

Kuckertz, Andreas; Brändle, Leif; Gaudig, Anja; Hinderer, Sebastian; Reyes, Carlos Arturo Morales; Prochotta, Alicia; Steinbrink, Kathrin M.; Berger, Elisabeth S.C.

doi:10.1016/j.jbvi.2020.e00169

Cited by 804 publications

(1,001 citation statements)

References 52 publications

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“…Entrepreneurship activities could offset the negative impacts of crises by maintaining the ow of goods and services and restoring public con dence of other business owners and the community at large (Doern et al, 2019;Szabo, 2011;Herbane, 2010;Chamlee-Wright & Storr, 2008). Kuckertz et al (2020) identi ed that entrepreneurs pursued new opportunities and established new directions for their rms during crises. Bishop (2019) proposed that a diverse and robust knowledge stock would foster entrepreneurship after crises events.…”

Section: Resilience Dynamic Learning and Strategic Renewal For Smesmentioning

confidence: 99%

Crisis Management for Small Business during the COVID-19 Outbreak:Survival, Resilience and Renewal Strategies of Firms in Macau

Alves

Lok

Luo

et al. 2020

Preprint

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We know that small businesses are vulnerable to crisis, however little is still known about how they cope during long crisis as the COVID-19 pandemic. This paper provides a qualitative analysis of small businesses in Macau, China, in the months following the outbreak. We collected interview data from six local small firms. We found that the sudden decline in demand has the strongest impact on small firms. As compared with large firms, new startups and small firms show high flexibility in their reactions to the crisis, partly due to the low level of bureaucracy and limited social responsibility compliance. Among the various types of response strategies, all participant firms adopted flexible HR strategies. Other common survival strategies include the increase of product diversification, exploration of new markets, and increase of learning. We also found that some small businesses had a formal crisis plan and strategy before the outbreak, and these firms tend to have longer history, experience in dealing with crisis, and operate in more regulated sectors. Based on these results, we define five types of renewal and survival strategies for small businesses and propose a SME crisis resilience model.

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Section: Resilience Dynamic Learning and Strategic Renewal For Smesmentioning

confidence: 99%

Crisis Management for Small Business during the COVID-19 Outbreak:Survival, Resilience and Renewal Strategies of Firms in Macau

Alves

Lok

Luo

et al. 2020

Preprint

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“…MSMEs therefore play a signi cant role in the economy and are considered as engines of economic growth (Wellalage and Fernandez 2019). COVID-19 has, however, resulted in dramatic changes in the economic and political environment in most countries, causing economic shocks and placing stress on healthcare systems across the world (Kuckertz et al 2020). In a bid to contain the spread of the virus, a number of countries have imposed national or regional lockdowns have had devastating repercussion for MSMEs.…”

Section: Impact Of the Covid-19 Pandemic On The Msme Sectormentioning

confidence: 99%

Does it pay to be green? Environmental performance and firm financing during COVID-19 outbreaks

Wellalage

Kumar

2020

Preprint

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This paper examines the effect of firm environmental performance on firm financing during the COVID-19 outbreak. Crises in multiple forms curtail Micro, Small and Medium Enterprises (MSMEs) stability and the livelihood of hundreds of millions of people who derive their living from these activities. The way in which MSMEs deal with crises and the extent to which environmental performance is beneficial when the market suffers a negative shock is relatively unexplored in the literature. We consider three aspects of financing -- firm level liquidity, bank credit and bankruptcy probabilities -- and argue that it pays for firms to show commitment to environmental responsibilities in a global pandemic. Through an examination of 3,356 MSMEs, we find that firms with better environmental performance reduce their probability of bankruptcies and their liquidities decreasing during the COVID-19 pandemic. Furthermore, analysis shows that the impact of a firm’s environmental performance is more pronounced in sensitive industries (hospitality and retail). The results are robust based on a series of robustness checks, including propensity score matching and the Heckman two-stage sample selection model. Our study suggests that the trust between a firm and its stakeholders, if it is grounded on environmental performance, pays off when the overall level of trust in markets suffers a negative shock. JEL Classification: F64; G01; Q14

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“…The Covid-19 pandemic and related restrictions are creating a global crisis, shaping the economic landscape and challenging entrepreneurs ( Kuckertz et al., 2020 ; Brown and Rocha, 2020 ). While organizational resilience is crucial to keeping business afloat in these times, crisis-based entrepreneurship research that might inform resiliency cultivation has remained scarce ( Doern et al., 2019 ; Linnenluecke, 2017 ; Monllor and Murphy, 2017 ; Bullough et al., 2014 ).…”

Section: Introductionmentioning

confidence: 99%

“…With the Covid-19 crisis, early research results have suggested diminished venture capital availability, particularly for early-stage ventures ( Brown and Rocha, 2020 ). Entrepreneurs have also been quick to take action to cut costs and seek support ( Giones et al., 2020 ; Kuckertz et al., 2020 ; Thorgren and Williams, 2020 ), although entrepreneurial needs and policy responses have not always matched ( Kuckertz et al., 2020 ), with for example entrepreneurs reluctant to take on additional loans ( Thorgren and Williams, 2020 ). However, these studies have provided limited insights into whether and how entrepreneurs might move from survival to thriving, calling for further research on creating new opportunities through innovation and revenue generating actions during the crisis ( Kuckertz et al., 2020 ; Thorgren and Williams, 2020 ).…”

Section: Introductionmentioning

confidence: 99%

“…In contrast, novel value creation or capture has been rare in extant results on entrepreneurial action in the face of the Covid-19 pandemic ( Kuckertz et al., 2020 ; Thorgren and Williams, 2020 ; Giones et al., 2020 ). For example, while the majority of Swedish 456 SMEs promptly took cust-cutting actions, fewer than 7% reported engaged in revenue generating or innovation activities ( Thorgren and Williams, 2020 ).…”

Section: Introductionmentioning

confidence: 99%

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Expanding entrepreneurial solution spaces in times of crisis: Business model experimentation amongst packaged food and beverage ventures

Björklund

Mikkonen

Mattila

et al. 2020

Journal of Business Venturing Insights

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Research summary Times of crisis require entrepreneurial responses to mitigate adverse effects and address new opportunities. This study focuses on how packaged food and drink entrepreneurs in Finland took action to create and capture new value during the Covid-19 crisis. Examining 844 social media posts of 66 ventures between March and May 2020 and interviewing 17 of these ventures, we found ventures to experiment with new business model variations, which not only expanded their set of solutions directly, but resulted in action-based learning leading to longer-term changes and increased capabilities for subsequent value creation. Furthermore, collaborative experiments and prosocial support increased the solution space through developing the capabilities of the ecosystem. Managerial summary The global lockdown measures in response to the coronavirus pandemic have disrupted supply, production, sales and consumption. Facing these constraints, entrepreneurs can respond quickly and experiment to create new liquidity and opportunities. Our analysis of packaged food and beverage entrepreneurs in Finland during the crisis shows how entrepreneurs leverage existing resources and acquire new ones to create new offerings, operations and partnerships. These initial actions serve as experiments to learn from in creating and revising business models, promoting a virtuous cycle of further action and expanding potential future solutions accessible to entrepreneurs. Importantly, opportunities available to the venture expand through both venture specific learning and through supporting other actors in the ecosystem.

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Startups in times of crisis – A rapid response to the COVID-19 pandemic

Cited by 804 publications

References 52 publications

Crisis Management for Small Business during the COVID-19 Outbreak:Survival, Resilience and Renewal Strategies of Firms in Macau

Crisis Management for Small Business during the COVID-19 Outbreak:Survival, Resilience and Renewal Strategies of Firms in Macau

Does it pay to be green? Environmental performance and firm financing during COVID-19 outbreaks

Expanding entrepreneurial solution spaces in times of crisis: Business model experimentation amongst packaged food and beverage ventures

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