Defy the pandemic
Social startups are proving to be robust
1/24/2022 1:32 p.m
In the corona pandemic, even well-known traditional companies are fighting for survival. However, the situation is even more difficult for many startups that are trying not only to make money, but at the same time to make the world a little bit better.
Shortly before the Corona crisis, Steffen Preuß developed an interactive ball with his startup Icho Systems, which was intended to offer dementia patients a new way of communicating with light, noise and vibration. Katharina Mayer created a start-up with cake gossip that sold cakes lovingly hand-made by senior citizens and at the same time offered old people a meeting place. Sebastian Stricker sold mineral water or liquid soap via Share and used part of the proceeds to help people in need. Then the pandemic came and changed everything for the startups as well.
Two years after the start of the pandemic, none of the three startups have given up. All three have changed and thus managed to assert themselves under changed conditions. In one point, however, they have remained true to themselves: it is still not just about the money for them. Like many other so-called social enterprises, they want to make the world a little bit better with their work.
“Overall, the sector has proven to be very resilient,” says Markus Sauerhammer, CEO of the social enterprise network Send. One reason for this is that innovation and adaptability are part of the DNA of such startups.
“Crisis survived quite well”
Example Icho: Steffen Preuß from Icho Systems developed a high-tech therapy ball for dementia and the mentally handicapped together with friends in 2019 and was about to start series production when the pandemic struck. The young entrepreneurs were hit twice by the crisis: delivery bottlenecks for electronic components slowed down production. At the same time, the overwork of nursing staff in homes and pandemic-related access restrictions meant that sales did not get off the ground either.
“We used the time and developed a lot,” says Preuss. While the company originally focused on selling the therapy balls, which cost a good 1,400 euros, to nursing homes, Icho is now concentrating on a rental model in order to reach more private customers. “People want our product, for their own parents with Alzheimer’s or for disabled children,” reports Preuss. And new ways of using the therapy ball have been developed – such as games for children with disabilities. “We were able to turn a defeat in the Corona crisis into a small success story,” says Preuss. Negotiations are now also being made with health insurance companies to make the ball prescription-capable.
Example cake gossip: The startup was founded in 2014 out of the conviction that grandma made the tastiest cakes – but also to do something social for seniors. For years, Kutentratsch sold cakes that “grandmas and grandpas” baked according to their own recipes in the company’s bakery in Munich. This should give pleasure to cake lovers, but also help seniors – through the social contacts associated with baking, the feeling of being needed and the additional income. Then Corona came and the baking operation had to be completely shut down for five months.
But that is now in the past. Baking has long since resumed – in compliance with strict Corona requirements. Around 50 “grandmas and grandpas” are already there again. “We got through the crisis quite well,” says Cake Gossip employee Theresa Offenbeck. It was successful because the company changed its strategy fairly quickly. When the bakery had to close, the sale of cake gossip baking mixes in its own online shop and in numerous shops in and around Munich helped to ensure survival.
Cake gossip only moved to a larger building at the beginning of the year, where a café and an adventure bakery will also boost sales in the future. “We have the feeling that the demand for products that represent something social and sustainable and are not just consumption is going up steeply,” says Offenbeck.
Double-digit growth rates
Example Share: While Icho and cake gossip suffered noticeably from Corona, the pandemic gave the Berlin startup a tailwind. The special thing about the company, which sells a variety of products from mineral water to soap to nut bars: for every product sold, a person in need is helped with an equivalent product or service. “On average, we were able to provide assistance every second in the past year,” says founder Sebastian Stricker. These include around 35 million days of access to clean drinking water, 1.7 million teaching hours facilitated and 500,000 trees planted.
Even during the pandemic, Share shone with good double-digit growth rates and expanded its range of products from initially 10 to a good 100. There are now also Share felt-tip pens and Share glasses. The products can be found in 16,000 shops – for example at dm, Rewe, Rossmann and Aldi Süd – but also at Deutsche Bahn and Lufthansa. Partnerships with banks and travel agencies are being considered.
“Corona has once again given the need for sustainability and responsible action in society a great boost, and we have benefited from that,” says Stricker. The startup is not yet in the black: “I think we could do it if we wanted to, but it would slow down our growth – and more growth means more help.”
In fact, the pandemic doesn’t seem to be able to slow down the idea of social startups. In any case, Dirk Sander from the Duisburg Impact Factory, which acts as a kind of “training ground” for young social entrepreneurs, does not feel any decline in the number of applicants. On the contrary: With Corona, the number of applications has even increased. “Society has problems, and Corona is exacerbating them. A lot of people are thinking about how society can be made future-proof,” he explains the trend.