Typically during a recession as companies tighten their belts the first budgets to get the chop are marketing, innovation and new product development. New Zealand is approaching a recession with the pinch already being felt across the industry as budgets are cut and major projects put on hold. However, with this comes new opportunities for start-ups and entrepreneurs who now have more time to tackle some of those projects and ideas that have been sitting idle. Students and graduates may have been planning their OE’s this year but with closed borders and fewer post-graduate jobs now is the time for these fresh thinkers to pursue those dreams of a start-up or developing an idea that they’ve been mulling over during their studies. A product or service that truly offers benefits and addresses unmet needs will be very interesting for those looking to thrive despite a bad economy. Also, for those looking to build a product or business, there is now a large talent pool of eager, young people to dive into an exciting venture who may otherwise be venturing overseas.
In times of hardship, people will re-evaluate how they spend their money and what they spend it on. With additional free time, people will spend more time researching and looking for meaningful products and services that fulfill their needs. This provides new opportunities for entrepreneurs, startups, and bigger businesses to re-focus on what is important to the customer, what do they need right now and how can we best provide this for them? The global pandemic has seen a surge in new business and product development opportunities from nationwide crowdsourcing of 3D printed face shields to large businesses such as the Good George brewery who pivoted some of their production facilities to produce a hand sanitiser in response to a vast surge in demand. Most notably is ‘New Zealand Made Products’ Facebook page set up in response to COVID-19. It showcases 1000’s of products that are being designed and made by New Zealanders. Some of these are existing businesses and others who have found that their circumstances have changed and now have more time to commercialise hobby projects.
Less Market Noise
During an economic boom, one of the hardest things for an emerging startup is getting noticed. Overall industry noise grows as the boom cycle gathers pace, with this comes increased difficulty in getting noticed by consumers, investors, and journalists.
During a recession, as larger companies put new product development on hold and dial back marketing budgets this creates an opportunity with less digital noise across typical advertising and social media platforms. Getting your product out in front of the right people becomes easier and cheaper as a void is created in new product offerings. You may have already noticed new products from smaller companies and start-ups starting to become more prevalent on your social feeds.
Getting your business or product story picked up by a media outlet is much easier and can lead to great free exposure.
In a recent Forbes article on the top 10 reasons to start a business in the downturn, John Greathouse describes the benefits of less noise;
“Although it can be more difficult to extract money from customers’ wallets in an economic downturn, the overall decrease in market activity makes it easier for emerging companies to cut through the clutter and tell their story.”
Reduced Production Costs
The cost to produce during a downturn is in general reduced as the costs of labour, land, food, and borrowing are generally lower along with lower interest rates and stimulus packages from the government. Callaghan Innovation is New Zealand’s primary distributor of government funding and support. They have recently announced that any businesses that have been struggling to fund R&D projects due to COVID-19 can apply for a loan of up to $400,000 under the new Callaghan Innovation loan scheme as well as an updated R&D Tax incentive.
More time to do it right
You have time, the pace slows and people have more time to work slower. This provides more of an opportunity to create well-considered impactful products. 2nd 3rd, 4th look-overs or iterations are possible. The design should be iterative by nature and with more time to build, test, and fail fast it allows new product ventures to be confident that they are launching a robust product into the market. The culture of asap delivery is often required by clients but, with more time to work, designers and clients can work more methodically and strategically together.
Opportunity to focus on and utilise Design Thinking techniques to approach complex problems through a designer’s lens.
As workloads lighten for traditional product design firms, the ability for designers to pivot their services and utilise Design Thinking techniques to approach new opportunities becomes an option for potential clients. Designers are particularly talented at approaching complex problems in unconventional ways. This is in part due to the fundamentals of putting humans at the centre of anything they design. Companies or individuals who have identified an area for innovation or product development can utilise the skill set of a designer to re-frame the problem and apply a whole new lens. This isn’t just limited to physical product design, a recession provides an opportunity for designers to be involved in service and infrastructure design.
Here at Formworks we are a small team of highly experienced designers who’ve worked on a vast range of products throughout New Zealand and Internationally. With clients such as Air New Zealand, Auckland Zoo and Les Mills we have a wealth of knowledge in tackling a diverse range of design challenges. We’d love to help you tackle your challenge head on. We offer a free and confidential consultation on your project or idea so get in touch if you’d like to talk more. firstname.lastname@example.org