The Impact of COVID-19 on the Global Startup Scene
At Agile Fuel, we are proud to be the go-to experts for recruiting and managing world-class dedicated engineering teams. Our proficiency ensures that fledgling startups and already established businesses can prosper by relying on the best tech talent available to them at the point of need.
Whilst the COVID-19 pandemic continues to decimate the economy and rock the business world, we maintain that our services are more critical than ever to both new and reputable direct engineering management ventures.
Despite generating nearly $3 trillion in revenue, the 2020 Global Startup Ecosystem Report (GSER 2020) has predicted that this epidemic could result in mass extinction for the majority of startups.
If you are on the brink of launching your startup company or are concerned about the future of your enterprise, then read on to learn how you can not only survive - but actually thrive - during this difficult economic downturn.
Launching a Tech Startup During a Challenging Market
The devastating reality is that 72% of the world’s startups have seen a slump in their revenue since January 2020. Even prior to the pandemic 82% of startups failed; not due to a lack of innovation but simply due to a mismanagement of their cashflows.
We are all currently attempting to navigate a very unsavory economic climate, so it is no great surprise that new business registrations have also dropped significantly in recent months.
Understandably the uncertainty of the market is creating an insurmountable challenge for the innovators behind startups and resulting in a world-wide reluctance to unveil new ventures. In fact, only 13% of entrepreneurs think now is the ideal time to launch a business compared with 26% in February.
So, what is the key advice for startup companies on how to efficiently launch and scale their operations during this difficult time?
How Outstaffing Will Enable Your Startup to Succeed in 2020
The inception of any venture is always a complex and difficult time. You may feel that as the startup CTO you need to oversee everything yourself to keep tight control of the reigns. The truth is that any difficulties you would normally face as a business owner will only be exacerbated by the current downturn in the global market due to the ongoing pandemic.
The natural inclination during times of economic distress is to look at making redundancies and reduce the payroll headcount. However, there are a number of other effective cost-cutting options that can actually benefit your business in the long run.
The reality is that outstaffing is an impeccable and unrivaled cost-saving approach that has a multitude of other benefits.
So, in what ways can outstaffing enhance any startup chances of rapid growth during COVID-19?
You Can Cut Costs
As a startup you may already have a limited budget and you will likely want to keep more of a keen eye on your finances due to the ongoing instability of the market.
However, utilizing available outsourcing and outstaffing methods is a great cost-saving approach. Hiring staff in the traditional manner takes time, money, and results in a lot of extra administration work. Not to mention that you’ll have the added costs of leasing a workspace, paying for equipment, and all the other amenities associated with having an in-person team. By using the professional services of outstaffing agencies to recruit and house highly-skilled dedicated engineering teams, you will instantly reap the cost-cutting benefits of remote work yet preserve full control over your team and its management.
You Can Reach the Market Faster
By its very nature, any startup wants to rapidly seize the market share and drive product adoption. However, with the current pandemic causing a drastic fall in consumer demand and a monumental decline in venture capital, time is of the essence more so now than ever.
Finding the specialists you need to help your startup excel can be a time-consuming and costly undertaking. With outstaffing to Eastern Europe, you will discover a pool of qualified talent so large and highly-skilled that it means you can build your engineering, data, design, and R&D teams in a swift and effective manner. This results in you entering the market faster and with greater flexibility of making ongoing changes to the product. Build, measure, learn.
You Can Free Up Your Time
Time is money! Outstaffing means you can side-step your Human Resources responsibilities and extensive paperwork. This means you as a CTO or a VP of Engineering can have more time to outline the company’s technological vision from its early days, implement smart technological tools and strategies for future scalability, and ensure that all the tech resources are aligned with the company’s business needs.
Get a Highly-Skilled Team in Different Areas of Expertise
As an entrepreneur, you’ll undoubtedly have extensive knowledge of your specialist industry, but maybe not the acumen needed to deal with recruitment and staffing. By outstaffing you can also open yourself up to an extensive pool of Eastern European experts, which you may not have uncovered if you’d only recruited within the local labor market.
The benefits of outstaffing to Eastern Europe are innumerable and include the average pay rates being 50-70% lower than in the US and EU, an impeccable educational infrastructure churning out over 60,000 IT specialists per year and a healthy work ethic, to name a few.
Scale-Up or Down to Suit the Economy
Due to the COVID-19 crisis, the market remains uncertain. In fact, only a meager 12% of startups reported any sort of growth in the first half of 2020. With outstaffing, you have the flexibility to increase or decrease the number of tech specialists you need at any point in time. This means scaling your engineering team and tailoring your needs based on the speed at which your startup evolves or on a project-by-project basis.
You Can Get More Done
Outstaffing enables a streamlining of processes and by optimizing your team and your workflows you will simply get more done. Moreover, by hiring experienced, vetted remote engineers, they can offer suggestions on the best ways to achieve the best results and help you make that all-important impact with your venture.
The Promising Future of Outstaffing Beyond COVID-19
Outstaffing is proving to be an invaluable asset during this time and undoubtedly more startups will continue to lean towards this model far beyond the pandemic. With the economy currently floundering, it is essential to find ways to cut costs whilst still scaling engineering teams.
For any venture looking for a scalable, stable but flexible and cost-effective solution to enhancing their engineering capabilities, the dedicated team outstaffing approach is the optimum choice.
If you’d like more information on how Agile Fuel can help your startup through the pandemic and continue achieving success with distributed engineering teams in a post-COVID world, then please get in touch.