Research - 21.09.2020 - 00:00

“HSG Spin-Off Barometer 2020”

What effect has the coronavirus crisis had on startups? The third “HSG Spin-Off Barometer” has looked into this question. The conclusion: 43% have had to accept business losses, 5% have been able to increase business activity. The crisis opened up new, sustainable opportunities for 43% of the newly founded companies, and 27% of them changed their business models.

21 September 2020. The Center for Entrepreneurship (CfE-HSG) carried out the HSG Spin-Off Barometer survey for the third time in spring and summer 2020 Due to the current situation, many of the questions revolved around coronavirus, which has affected every area of life as well as the economy. The survey was intended to gauge how startups are reacting in these times of crisis. Furthermore, the intention was to find out how startups are using and targeting their skills to find successful strategies and identify new opportunities amidst adverse conditions.

Most of them were able to draw out new opportunities from the crisis

The survey revealed that only 12% of startups had remained unaffected by the crisis. The most frequently mentioned impact (60%) was the decrease in sales volume. The most commonly used adaptive measure is allowing employees to work from home. More than every fourth startup changed its business model. The vast majority of startups were able to draw out new opportunities from the crisis. For 43% of the new startups, new, sustainable opportunities arose, and for 47% new temporary opportunities, which will presumably disappear again after the crisis. Most startups began to concentrate more on digital solutions (online marketing, online sales etc.).

Overcoming the crisis by initiating new ideas

The answer to the question as to the origin of ideas on how to cope best with the crisis also revealed interesting results. Concepts originated primarily from the founders or the staff. The startups surveyed proved to be strongly action-oriented: 80% of the ideas were implemented. With regard to investments, 37% actively sought support from their investors.

HSG startups are doing relatively well, despite the crisis

The “HSG Spin-Off Barometer 2020” also shows where the startups are positioned in their startup phase. Three out of four indicated that they have constant, recurring income or are in a growth phase. A third of the startups taking part in the survey had a turnover of more than a million francs. Year-on-year the proportion of startups with annual sales over CHF 500,000 rose by 6% in total, to 41%. Spin-offs operate worldwide, with a strong focus on Europe. The USA follows, at 10%, Asia at 5% and in equal proportion, South America, Africa, and Australia, all at 2%. Within Europe, business activities are concentrated within the DACH region.

The sector focuses on software and internet services, as do the spin-offs. Consulting, food/beverages, health, tourism, EdTech, fashion, e-commerce and automotives follow close behind. The “Barometer” also shows that HSG spin-offs cover a broad spectrum of different industrial sectors.

148 companies have been awarded the “label”

Since 2017, companies founded by individuals associated with the University of St.Gallen can apply for the “HSG Spin-Off label”. Anyone operating a successfully established business or whose startup has been on the market for at least 12 months can apply to the Centre for Entrepreneurship (CfE-HSG) for the seal of quality. The HSG Spin-Off label is highly prized, Up to September 2020, 148 companies have been distinguished with the “label”. The current list of companies bearing the HSG Spin-Off label can be found on the CfE-HSG website.

You can see all the results of the HSG Spin-Off Barometer 2020 survey on the website of the Center for Entrepreneurship (CfE-HSG):