“Suddenly, there’s all these companies that would probably never have touched technology with a barge pole wanting to do as much as they can digitally. They now realise they can drive efficiency, productivity and customer engagement through greater use of digital. The key will be to connect those two areas – the technical and the non-digital – to increase digital adoption overall.”
Brad Hyett, CEO at fintech start-up Phos, expects the coronavirus crisis to lead to a surge in start-up launches across the sector, as larger companies struggle to keep pace with even faster-changing demand for tech. “Established businesses have so many moving parts, and so many balls in the air, that when sudden shifts in the economic environment like this happen they’re not able to react quickly enough,” he says.
“Start-ups tend to be more agile and specialist. And they don’t necessarily have an appetite to steal customers away from you. I think we’ll start to see these types of businesses pop up rapidly now more than ever.”
Hyett adds that any redundancies at larger tech firms resulting from coronavirus are likely to add to this start-up momentum. “The next three to six months are going to be interesting. There will be many rounds of redundancies, and you’ll get a lot of highly skilled people – who are already plugged into investors – launching new businesses in any areas in the market where they recognise a strong need.”
Identifying a need
In terms of the tech sub-sectors where innovation is most likely to be needed, and where start-ups may see better opportunities to step in and meet demand, Hyett identifies medtech and insurance tech (or ‘insuretech’) as particular areas to watch.
“Any tech that solves the problem of identification, verification or fraud reduction, or anything like that, will be highly sought after. Technologies that solve proof-of-age, or proof-of-delivery issues are becoming so much more important now too, as more and more of our daily processes are being done remotely,” he adds.
But Dunn believes it would be a mistake for tech entrepreneurs to choose this particular moment to jump headlong into an area of the sector – like medtech or retail tech – that’s received lots of attention during the pandemic. Instead, his advice for start-ups is to focus more on the longer-term recovery from coronavirus.
“I would be looking more at what comes after,” Dunn says. “Clearly, there’s a need at the moment for technologies that make queuing at supermarkets easier, or enable better social distancing in shops. But how long will those be needed for? Six months to a year?
“I think the leisure industry is where the biggest challenges and opportunities are for tech companies. The need to build tech into spaces where people meet socially, like restaurants and pubs, will increase. The desire to interact and socialise will never go away, but we’ll need to do it safely. That’s where tech can step in.”
