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How can businesses prepare for the next pandemic?

How can businesses prepare for the next pandemic?
The three-day event was held between 13 and 15 August

By: Amal A. Wahaab

Cairo – Mubasher: RiseUp Summit has recently concluded its first virtual event, RiseUp from Home, which was launched in line with the preventive measures against the coronavirus pandemic.

The three-day event was held on 13-15 August through the online eventtus platform, under the slogan “Got Grit?”

The event hosted world-class speakers to provide insights on how to cultivate resilience in the face of hardship, navigate the obstacles and setbacks caused by the pandemic, and how can businesses emerge stronger and more agile, despite all odds.

Since the onset of the year, the coronavirus impacted businesses worldwide massively, forcing many companies to make radical changes in their business models and day-to-day operations.

Under the theme “How to Prepare for the Next Pandemic”, Tarek Fahim, Managing Partner at Endure Capital, and Issa Aghabi, Regional VC Lead - MENA. ECA and Pakistan at IFC, discussed some of the measures businesses can take today to learn from COVID-19 and prepare communities to be more resilient in the face of future crises?

On how can business gauge the effects of the current pandemic, Aghabi shared a story of one of his friends who is a fund investor, saying that while discussing the status quo together, the friend said he had always prepared contingency plans A, B, C, and D, yet, what happened this year is that A, B, C, and D were all hit together and the worst of the worst scenarios were present.  

Aghabi handed over a question to Fahim, how are you navigating this as an investor and fund manager?

Fahim said that for Arab stage investors, things were relatively much better, given that they have more flexibility and resilience most of the time since they do not have big operations or a lot of costs. However, he spotlighted a number of steps that all investors must address first during any difficult time.

To start with, investors should make sure that they are working and taking decisions very fast, no matter what is going to happen. Second, they should know their businesses’ cash position. Some of the options that helped some businesses navigate the pandemic setback included: reducing costs, fundraising, and consolidation.

Moreover, an understanding of the dynamics on the short and medium terms is important.

For his part, Aghabi, who invests in several funds across the Middle East, emphasised that the cash position is the silver lining that ensures the survival of the business when a pandemic hits, regardless of its type.

“Your survival as a startup is about how you manage your cash for the short and medium-term” Aghabi stressed, highlighting that resilient entrepreneurs should try to conserve the company’s DNA, cash, as long as possible.

Despite all odds, many of the companies operating in the electronic commerce (e-commerce), logistics, HealthTech, and EdTech space emerged as winners during the coronavirus pandemic and adapted very quickly to the sudden change.

Another front Aghabi tackled in this regard is the focus on the business’ fundamentals. While the growth factor is important, investors need to think about what drives the business and how can this business functions properly in a worst-case scenario.

In addition, Fahim stated that some of the businesses that were hit hard by the pandemic may need to work on their branding so as to fit in the new community, provided that they have enough cash.

For example, recruitment firms can take advantage of the abundant data they have and offer corporates and companies operational and hassle-free learning and mentoring programmes.

“A pandemic, in general, is a severe and sudden change that comes with an opportunity and with a challenge. If you manage to act fast and think of it as an opportunity, you can actually reach something higher than what you expected,” Fahim said, evidencing this with Apple’s exponential growth in market cap value, which neared $2 trillion.

Q&As 

One of the event attendees asked for advice for the businesses that were operating well before the pandemic but did not have the chance to survive or prepare to grow moving forward?

Fahim suggested consolidation and diversification of the products or services offered, if possible. He also noted that the business-to-business (B2B) is a great strategy if the investor is targeting the right market, but recommended the business-to-consumer (B2C) option, particularly during hard times.

Another attendee asked, how do you see launching a startup in the coming months, economically and financially?

Fahim said that a good startup is a good startup regardless of anything that happens around, giving an example of the current position of Facebook and Uber compared to the challenging time they were launched in.

Aghabi also encouraged the attendee to go ahead and launch the startup if the idea is good and the business is a fundamentally strong one. He stressed that innovation and disruption come in desperate times, noting that he has seen a great number of opportunities emerging across markets like Egypt, Saudi Arabia, the UAE, and Jordan over the past month or two.

“Things will come back eventually, people will survive, and we will eventually forget completely and move on with life,” Aghabi concluded.