BY THE NUMBERS: How the Coronavirus is Impacting Startups

Banner image for post BY THE NUMBERS: How the Coronavirus is Impacting Startups

Let’s measure exactly how the Coronavirus is impacting startups in 2020.

How is the coronavirus impacting your startup’s growth plan?  Your fundraising?

What is the quantifiable impact COVID19 is having on your startup’s financials?

I’ve been looking at our clients and fundraising resources to get a better picture of the startup ecosystem in a post-COVID19 world.

Here are some stats that got my attention:

(1) STARTUP GROWTH STATS

coronavirus impact startups b2c ads

  • For B2C companies, there is a 55% drop in on-site conversion. Prospecting is down 31% and retargeting is down 67%.
  • CAC is up 45% for B2C companies on social ads.
  • CPMs are down 29% – there is one positive stat for you.

Wait, what does this mean for me?

While it’s cheaper to get eyeballs on your ads (low CPMs) people are being “browsy” and not buying.  What should you do?  If possible, you campaigns should be about building brand equity, capturing emails, and playing the long game. If you still want to go for the purchase, then here are some positioning tactics to use: present your product as essential, play up “ships from USA”, or remind people to “stock up” while they can.

(2) STARTUP FUNDING STATS

coronavirus impact startups funding

  • Seed-stage funding in the US is projected to decline by 22% in Q1’20 compared to Q4’19.
  • The number of global seed deals is predicted to fall only 8% during the same period.

Wait, what does this mean for me?

No surprise that it’s hard to raise money right now but we’ll see how hard.  For categories like healthcare, remote work, bio-tech, gig-economy, it might be easier than anything related to hospitality, retail, or SMBs. This could mean you need to extend your burn by cutting costs, shift to profitability in place of growth, or produce short-term income to keep the lights on.

Summary of the Coronavirus Impact on Startups

It truly pains me to hear about the passionate teams that are getting wiped out by this unprecedented crisis.  But, if these teams can survive and plant some long term seeds in growth they can come out of this on top. For some brands, that’s investing in funnel design, rethinking personas and positioning, optimizing ads for email and brand awareness, or investing in email nurturing. At our growth marketing agency, we’re always happy to talk through how to strategize during this time. 

 

*** Stats and graphs are from Socialfulcrum.com and cbinsights.com

Jim Huffman

Founder & CEO GrowthHit. Startup mentor at Techstars, General Assembly, and Sephora Accelerator. Author of The Growth Marketer’s Playbook #1
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