Entrepreneurs can respond to opportunity in three ways: business-as-usual, pivoting, and new venture creation, write Ali Aslan Gümüsay and Pegram Harriso

Gümüsay, Ali Aslan

Harrison, Pegram

English

LSE Research Online

‘Never	let	a	crisis	go	to	waste’:	entrepreneurship	inthe	age	of	coronavirus“Never	let	a	crisis	go	to	waste!”,	People	may	say	this	when	facing	some	sort	of	significant	challenge,	and	trying	toturn	it	to	their	advantage.	As	COVID-19	has	become	a	global	crisis,	it	presents	enormous	opportunities	to	somepeople.	In	fact,	this	crisis	is	no	idle	time	for	many	entrepreneurs.	They	are	among	the	first	to	offer	and	deliverinnovative	responses.	If	some	of	them	act	selfishly	or	wrongly,	many	others	are	moving	swiftly	and	creatively	tomake	permanent	and	valuable	changes	in	the	world.	Their	innovations,	technological	and	otherwise,	have	alleviatedthe	effects	of	the	crisis;	harnessing	their	best	entrepreneurial	impulses	will	help	find	ways	out	of	it.Entrepreneurship	good	and	badIt	is	true	that	not	all	entrepreneurship	is	good.	As	pointed	out	by	Baumol,	some	entrepreneurship	is	unproductive	oreven	destructive,	even	in	a	crisis.	For	instance,	some	entrepreneurs	are	buying	up	and	re-selling	medicalequipment	at	a	very	high	mark-up.	They	have	seen	demand	increase	and,	many	would	argue,	extorted	situations	ofextreme	necessity	to	make	large	profits.	Other	unscrupulous	entrepreneurs	have	purchased	patented	drugs	andthen	greatly	increased	the	market	price.	These	responses	to	the	crisis	definitely	raise	ethical,	and	even	legal,eyebrows.On	the	opposite	side,	some	entrepreneurs	are	developing	products	and	services	to	ease	the	crisis,	instead	ofmerely	taking	advantage	of	it.	Both	incumbent	and	newly	emerging	commercial	and	social	entrepreneurs	areaddressing	the	crisis	in	creative	ways.	Indeed,	at	any	time,	entrepreneurs	demonstrate	three	types	of	positiveresponses	to	the	opportunities	they	perceive:	business-as-usual,	pivoting,	and	new	venture	creation.	Each	of	theseresponses	face	a	different	challenge:	the	need	to	scale	quickly,	the	task	of	radically	transforming	their	businessmodel,	and	a	lack	of	resources.Business-as-usualSome	ventures	such	as	Zoom	and	other	digital	communication	platforms	already	have	the	right	products	andservices	to	help	others	face	this	crisis.	They	are	now	growing	quickly	and	need	to	keep	pace	with	demand.	Asworkers	around	the	globe	work	from	home,	companies	that	offer	tools	for	content	creation,	video	conferencing,document	sharing,	task	management,	polling,	and	so	on,	excel.Other	ventures,	both	young	and	established,	are	adapting	their	existing	offerings	to	meet	these	new	circumstances.Facebook,	Google	and	other	Silicon	Valley	companies	are	expressing	their	entrepreneurial	culture	by	rapidlygaining	ground	on	Zoom	by	acquiring,	developing	and	expanding	rival	videoconferencing	services.LSE Business Review: ‘Never let a crisis go to waste’: entrepreneurship in the age of coronavirus Page 1 of 3		Date originally posted: 2020-06-26Permalink: https://blogs.lse.ac.uk/businessreview/2020/06/26/never-let-a-crisis-go-to-waste-entrepreneurship-in-the-age-of-coronavirus/Blog homepage: https://blogs.lse.ac.uk/businessreview/PivotingMany	other	entrepreneurs	have	been	pivoting.	More	than	adapting	individual	products	or	services,	they	have	beenshifting	the	focus	of	their	venture	and	radically	changing	their	business	model.	For	instance,	some	companies	havecompletely	pivoted	their	production	focus:	from	alcoholic	beverages	to	disinfectant	products,	or	from	normal	clothingto	face	masks.Some	have	done	so	out	of	commercial	calculation,	perceiving	a	new	market	or	marketing	opportunity.	Others	wishto	help.	This	is	especially	visible	among	social	entrepreneurs.	For	instance,	“GoodJobs.eu”	is	a	German	platformthat	focuses	on	jobs	with	an	ecological	and/or	social	purpose;	it	has	added	a	new	job	category	and	now	alsoadvertises	jobs	that	are	related	to	the	Corona	crisis.New	venturesNew	ventures	have	also	emerged	from	the	crisis,	some	of	them	from	hackathons.	A	hackathon	(from	“hacking”	and“marathon”)	is	a	sprint-like	collective	event	to	find	solutions	to	problems	too	big	for	individuals.	In	a	crisis,	“hack-a-sprint”	might	be	a	more	appropriate	word.	In	urgent	times	such	as	these,	the	goal	is	to	hack	the	crisis	with	newentrepreneurial	solutions	as	fast	as	possible.	In	particular,	new	platforms	have	emerged	to	connect	demand	andsupply:	customers	with	local	restaurants	and	shops,	people	in	need	of	care	with	care-givers,	and	artists	withaudiences	–	some	including	new	streams	of	revenue.For	instance,	in	Germany	multiple	projects	have	emerged	from	a	hackathon	providing	Corona-related	information,learning	and	teaching	tools,	and	local	support.	In	the	UK,	Oxford	University’s	Foundry,	an	entrepreneurship	learningspace	and	new	venture	accelerator,	launched	its	“COVID-19	Rapid	Solutions	Builder”	hackathon,	“rapidly	building,scaling	and	implementing	new	solutions	to	challenges	that	will	arise	as	a	result	of	the	pandemic	in	order	to	buildresilience	for	the	future.”Technology	at	the	forefrontAcross	these	three	responses,	it	is	clear	that	technology	has	an	important	role,	for	many	reasons.	For	example,some	entrepreneurs	are	using	3D-printers	to	make	medical	equipment,	harnessing	the	innovative	potential	of	recenttechnologies	to	act	swiftly	and	without	the	need	for	central	control.	As	borders	are	closed	or	border	crossing	limited,and	as	demand	for	certain	products	increases	across	the	globe,	a	3D	printer	can	be	deployed	locally	to	meet	newrequirements.Also,	as	the	COVID-19	crisis	disrupts	certain	social	practices	and	needs,	technology	can	provide	some	substitutes.For	instance,	many	social	networking	platforms	–	existing	and	novel	–	offer	services	for	the	elderly	and	quarantined.Technology	helps	to	overcome	social	and	spatial	constraints	caused	by	the	pandemic.A	double-edged	swordOf	course,	there	are	also	valid	critiques	of	this	sort	of	response	to	a	crisis.	A	strongly	entrepreneurial	mentality	canlead	to	what	writer	Evgeny	Morozov	calls	“solutionism”:	a	belief	that	technology,	innovation	and	entrepreneurshiptogether	will	solve	problems	and	save	the	world.	This	belief	neglects	questions	of	power	and	politics,	and	ofnegative	consequences.	Entrepreneurial	ventures	are	privately	owned,	and	if	they	address	social	concerns	theygenerally	do	so	without	the	legitimation	of	democratic	processes.	Even	when	entrepreneurs	do	build	their	businesson	values,	questions	persist:	whose	values?	and	for	whom?	There	is	a	real	risk	is	that	entrepreneurs	crowd	outsocial	and	state	initiatives,	and	leave	questions	of	authority	and	accountability	unaddressed.It	is	also	important	to	note	that	entrepreneurs	do	not	act	in	a	vacuum.	In	fact,	the	infrastructure	they	use	to	foundtheir	ventures	is	still	often	publicly	funded.	Many	responses,	particularly	in	times	of	crisis,	are	actually	responsesthat	“orchestrate”	different	players,	both	public	and	private	–	either	directly	through	multi-stakeholder	partnerships,or	indirectly	through	creating	market	and	political	infrastructures.	Even	in	a	crisis	such	as	COVID-19,	it	is	worthremembering	how	interconnected	entrepreneurs	are	as	they	develop	their	ventures,	commercial	and	social	alike,	soas	to	hold	them	up	to	scrutiny	if	necessary.“Never	let	a	crisis	go	to	waste”	is	good	advice,	as	long	as	the	consequences	of	that	opportunism	are	broadlybeneficial	and	accountable.LSE Business Review: ‘Never let a crisis go to waste’: entrepreneurship in the age of coronavirus Page 2 of 3		Date originally posted: 2020-06-26Permalink: https://blogs.lse.ac.uk/businessreview/2020/06/26/never-let-a-crisis-go-to-waste-entrepreneurship-in-the-age-of-coronavirus/Blog homepage: https://blogs.lse.ac.uk/businessreview/♣♣♣Notes:This	blog	post	expresses	the	views	of	its	author(s),	not	the	position	of	LSE	Business	Review	or	the	LondonSchool	of	Economics.Featured	image	by	Joe	Ciciarelli	on	UnsplashWhen	you	leave	a	comment,	you’re	agreeing	to	our	Comment	PolicyAli	Aslan	Gümüsay	is	head	of	the	Innovation	&	Entrepreneurship	Research	Group	at	the	HumboldtInstitute	for	Internet	and	Society	(HIIG)	and	postdoctoral	researcher	at	the	University	of	Hamburg.	Heis	also	the	principal	investigator	of	the	DFG	network	“Grand	Challenges	&	New	Forms	of	Organizing”.At	HIIG,	Ali	coordinates	projects	related	to	digital	innovation	and	entrepreneurship.	This	includeswork	on	(social)	digital	entrepreneurship,	platforms,	AI,	digital	transformation,	and	open	innovation.Ali’s	own	research	consists	of	four	streams:	values,	meaning	&	hybridity	in	entrepreneurial	settings;grand	challenges,	innovation	&	new	forms	of	organizing;	societal	complexity	&	engaged	scholarship;and	digitalisation,	AI	&	the	future	of	work/leadership.	Twitter:	@guemuesayPegram	Harrison	is	senior	fellow	in	entrepreneurship	at	Oxford	University’s	Saïd	Business	School,and	lecturer	in	management	at	Brasenose	College,	Oxford.	His	research	and	teaching	concernentrepreneurship	and	leadership,	particularly	in	cultural	contexts.	He	teaches	entrepreneurship,leadership,	strategy	and	heritage	management	to	executives,	as	well	as	on	the	MBA	andundergraduate	programmes.	He	also	runs	Saïd’s	programme	of	teaching	and	research	called“Engaging	with	the	Humanities”;	teaches	on	the	Oxford	Cultural	Leaders	Programme;	andcoordinates	a	joint	research	programme	with	the	University	of	Bologna	on	management	and	thehumanities.	These	initiatives	link	researchers	with	cultural	institutions,	policy	leaders,	development	agencies,	digitaltechnology	providers	and	civic	officials.	Twitter:	@pegramoxford	LSE Business Review: ‘Never let a crisis go to waste’: entrepreneurship in the age of coronavirus Page 3 of 3		Date originally posted: 2020-06-26Permalink: https://blogs.lse.ac.uk/businessreview/2020/06/26/never-let-a-crisis-go-to-waste-entrepreneurship-in-the-age-of-coronavirus/Blog homepage: https://blogs.lse.ac.uk/businessreview/

‘Never let a crisis go to waste’: entrepreneurship in the age of coronavirus

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‘Never let a crisis go to waste’: entrepreneurship in the age of coronavirus

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