www.business-review.eu Business Review | September 2021
20 ENTREPRENEURSHIP
Measuring the costs of the pandemic shock among local startups More than 70 percent of Romanian startups were impacted by the pandemic crisis in the past year, and founders have had to make hard decisions for the future of their companies, including cost cutting, hiring freezes or delayed investments. Tech companies in some industries have flourished during the pandemic, while the rapid recovery of the Romanian economy will provide an impetus for startups that have decided to reposition themselves or for entrepreneurs who have scaled up their companies against all odds. By Ovidiu Posirca sitioning have done things like freezing the hiring process, cutting salaries, and reducing administrative costs while experimenting with new prices on the market for a more efficient repositioning. External repositioning targeted medium-sized companies that chose to freeze bonuses and salary increases, conduct layoffs, and postpone investments. The scaling-up process has given larger companies a chance to change their organisational strategy and marketing position. Most small startups, mainly operating in areas like FinTech, Automation or HealthTech, pushed the deployment of their products by expanding their tech teams by one or two members and increasing their marketing budgets,” Bogateanu told BR. Some 70 startups in the ROTSA survey, conducted among 117 entrepreneurial firms, had a balancing strategy once the health crisis emerged. The study revealed that over 70 percent of the startups confirmed that COVID-19 had affected their business to some extent. From the very beginning of the health crisis, Cristian Munteanu, managing partner The pandemic poses a higher risk for stagnation or even degrowth for some local startups
E
at Early Game Ventures (EGV), held talks with the founders of startups in the fund’s portfolio and agreed on immediate and radical measures to contain the damage of the pandemic.
nterprises of all sizes have had to
aptation strategies and repositioning market
adapt to the new economy and for
tools, suggests Cristiana Bogateanu, execu-
startups, this meant financial expan-
tive director of the Romanian Tech Startups
spot, whether it was freezing new hires,
Association (ROTSA).
postponing large marketing expenditures or
sion, access to finance, and investors willing
“All measures were implemented on the
shifting focus from opening to markets to
to fund their operations. The limitation of activities amid the pandemic brought with
FROM SALARY CUTS TO TEAM EXPANSIONS
R&D. The priority at that time was to limit
it a series of opportunities by generating ad-
“Companies that have chosen internal repo-
the damage, preserve the runway, and buy
