Olga Barretu-Gonsālvisa: "What took a few weeks prior to the crisis, now needs to be done in three days"

Olga Barretu-Gonsālvisa who takes care of Latvian startup ecosystem and is in charge of Startup Support Division at the Investment and Development Agency of Latvia (LIAA) tells about the impact of crisis on startup community and why it is prepared to adjust to the changing reality. Already now, there are many successful examples. For some luck has been on their side but for others it means fundamentally changing their business. Olga is also involved in organising hackathons and shares her experience on how to organise them in three days even though prior to crisis this would have taken several weeks.

COVID-19 crisis has definitely had an impact on startups. Are they able to make better adjustments to the new reality?

There is no doubt that crisis has affected every business, especially those having no spare resources or deep pockets. But I believe that startups are in average better prepared for the crisis. Also their capacity to change is much higher as ability to adapt lies deeply in their DNA. From the day they start developing their ideas, the team is aware that the product idea, business model, strategy are not something fixed. The team has to be ready to make dynamic decisions and radically change the direction of their business.

Therefore I believe that as hard as it is startups and innovative companies will find strength and new opportunities in this crisis.

Interesting fact: we recently did a survey of startups, and almost every single one out of 45 respondents admitted seeing opportunity to adjust their products so that they can recover after the crisis.

Were you able to identify the main problems startups are facing right now?

Our survey showed that prior to the crisis almost all startups were working on product development, most of them were building brand awareness, acquiring partnerships and raising investment. Almost a half were building operations and expanding. 29% said they were hiring additional talent.

Now 60% admit their business is slowing down, 33% need to cut operations costs badly, 31% are experiencing a significant drop in demand for their product in global market, are cash-strapped or their supply chain is negatively affected. Approximately a third experienced a remarkable drop in demand for their product in local market or agrees that the crisis is likely to hit them within 2-3 months from now. Also 84% of the respondents have moved all or substantial portion of their work into remote mode, 69% have stopped hiring new talent, 38% have cut talent’s wages but 22% laid some people off.

Are there any good examples from the startup community – companies that are not only surviving but also thriving in this situation?

There are industries where crisis has given extra opportunities as some businesses don’t have to do anything special but the demand for their products and services is increasing. Producers of chemical and mechanical protective equipment, companies offering home deliveries (food, meals, medicines, etc.) are doing good.  Also developers of remote work platforms and lifestyle apps are thriving. Luck has been on their side!

But there are those who mobilise themselves and keep going.

“Marine Digital” is a startup that with support from LIAA was granted a startup visa and is growing in Latvia for already a year. “Marine Digital” is making automation technology for ports, etc. Last week the company announced having raised pre-seed investment form Germany.

It is obvious that during crisis investors are much less active. But there are always startups that against all laws of physics manage to do what’s necessary. They make me truly happy.  There are ideas that are born in crises – as new products or as a result of startups fundamentally changing what they do.

This is where the winners of “HachForce” hackathon “Shield48” should be mentioned. In 48 hours the team came up with a product which was validated by medics and made their first prototype. Idea authors have already signed the agreement for production of 10 000 masks and have started exporting. This means it takes only a month to get from idea to export. This is the speed of startup adjustment that I have mentioned.

Another example – “Exonicus” that won the third place in the hackathon and is a provider of trauma simulator. In a few days the team started developing another VR simulation to help medical staff prepare (getting dressed/undressed) for treatment of COVID-19 patients.

You are involved in organising online hackathons. Where are the ideas about organising them coming from?

The idea came from our startup community – we called each other, were monitoring a similar hackathon in Estonia as they were the first to try organising it online. And in literally three days the hackathon was ready. We used such platforms as Guaana, Zoom and Slack. Social media were used to promote the event. This is what shows the true mobilisation force of startup community. Also hackathon is the type of event that suits crisis well as it allows for creating and implementing rapid solutions.

On 17-19 March the first fully virtual hackathon “HackForce” took place. Is it easier to organise such events online? What does the process look like?

It was very hard to make something like this happen online within three days. Ideally we would have planned such an event for several weeks. But I believe the results were very good. There are a limited number of participants in a traditional hackathon. In Latvia it is in average under 100 people. An online event is an opportunity to have much more participants, mentors and experts. In numbers the hackathon looked as follows: 48 hours, more than 850 people from 25 countries joining the public Slack, 70 mentors, 27 teams succeed, live-stream viewed by over 15 000 people. It would have not been possible in an in-person event.

Are similar events planned in the nearest future?

Similar hackathons are being organised all over the world. During Easter Latvia joined “The Global Hack” which was organised in 11 tracks. Our startup community took care of two of them – Economy and Environment. The third place winner team “Material Mapper” was led by a Latvian.

Are the ideas developed during a hackathon viable and can they compete with those that have been worked on for months, tested by focus groups, etc.?

Experience shows that every hackathon gives at least a couple of ideas that turn into something real and are viable. As was the case with “HackForce” – the ideas were not only viable but also fast to implement.

What is the possibility that the hackathons will be organised online in the future too?

COVID-19 crisis makes all of us test our limits, so I think that the pre-crisis and post-crisis reality will differ as more and more people will choose online activities and processes. There are some advantages to face-to-face meetings but online environment means lower costs, more participants and reaching a larger audience.